Delaware Losing $14 Billion Affirm Holdings

Another major e-commerce player is departing from Delaware as corporations pack up and find a new domicile for their businesses.

Affirm Holdings Inc., a publicly held American technology firm with a market cap of about $14 billion, is preparing a move to either Nevada or Texas, reports GuruFocus.

Affirm, founded in 2012 by PayPal co-founder Max Levchin, handles financial services for merchants and shoppers. The company is headquartered in San Francisco but seeking shareholder approval to move its corporate domicile from Delaware.

Levchin, who has voting influence in the company, is reportedly driving the decision to leave the state.

The news about Affirm comes in the wake of Mercado Libre, a leading Latin American e-commerce platform, announcing in a SEC filing its plans to seek stockholders' approval to move its corporate domicile from Delaware to Texas. The Nasdaq-listed MercadoLibre Inc. has a market cap in excess of $100 billion.

Several other major corporations have left Delaware or announced plans to leave after a series of controversial judicial decisions, including a judge's decision to deny Elon Musk a $56 billion compensation package from Tesla after shareholders had twice approved the plan.

"Never incorporate your company in the state of Delaware," Musk posted on X after the court's ruling.

Last week Musk applauded the Mercado Libre push to leave Delaware and said he was not surprised.

"At this point, any lawyer recommending incorporation in Delaware is committing malpractice," he posted on X.

Delaware has for decades attracted businesses because of its well-established legal framework and courts.

The state's reputation as a neutral legal playing ground, however, has changed because of recent court rulings from a left-leaning judicial system.

Other companies recently announcing their moves from Delaware include AMC Networks Inc., the owner of the cable AMC Channel, which plans to reincorporate in Nevada, and Madison Square Garden Entertainment.

At least 20 major companies this year have announced plans to leave the state, including Musk-owned Tesla and SpaceX, which have moved their corporate home to Texas.

Facebook parent company Meta and Walmart are also reportedly considering moves to Texas or another state.

Other significant companies taking steps to leave Delaware include President Donald Trump's Truth Media, Tripadvisor, The Trade Desk, and Roblox, according to Coastal Network.

Others point to a court action forcing Fox News into paying a staggering $787 million settlement with a voting machine company over reporting relating to the 2020 election.

Viet Dinh, Fox's chief legal officer, commented that court rulings in the state "called into question the fundamental fairness and integrity of the Delaware civil justice system."