Billionaire Elon Musk applauded one of Latin America's leading ecommerce companies for quitting Delaware as its corporate domicile.
Last week Mercado Libre, a leading e-commerce platform in Latin America, announced in an SEC filing its plans to move its corporate domicile to reincorporate its operations in Texas.
Musk greeted the Mercado Libre announcement with little surprise, saying on X: "At this point, any lawyer recommending incorporation in Delaware is committing malpractice."
Musk's tweet on Mercado Libre saw 40 million views and 18,000 retweets.
With a market cap in excess of $100 billion, Mercado Libre is one of many major corporations that have fled the state after a series of controversial judicial decisions, including a judge's decision to deny Musk a $56 billion compensation package from Tesla after it had been approved by shareholders twice.
Mercado Libre, the first major Latin American company to be listed on the Nasdaq Composite Index, said in a notice for its upcoming stockholders meeting on June 17 that one of its items to be discussed will be a call "to approve the redomestication of Mercado Libre, Inc. from Delaware to Texas by conversion."
Delaware for decades attracted businesses because of its well-established legal framework and courts, but the state's reputation as a neutral legal playing ground has changed because of recent court rulings from a left-leaning judicial system.
The news that Mercado Libre is leaving comes on the heels of an announcement last week that AMC Networks Inc., owner of the cable AMC Channel, is planning to leave and reincorporate in Nevada.
The news about AMC came days after Madison Square Garden Entertainment said it was also planning to leave the state.
At least 20 major companies this year have announced plans to leave the state.
These include Tesla and SpaceX, whose owner, Musk, moved their corporate home to Texas last year after a judge with the Delaware Court of Chancery nullified his $56 billion compensation package.
"Never incorporate your company in the state of Delaware," Musk posted on X after the court's ruling. Musk's announcement has led to a flood of major companies quitting the state.
In February, Pershing Square Capital Management founder billionaire Bill Ackman announced the company's plans to reincorporate in Nevada, with Dropbox following his actions and finalizing its move this month.
Facebook parent company Meta and Walmart are also reportedly considering moves to Texas or another state.
According to Coastal Network, several other companies with a market cap of greater than $100 million either plan to leave the state or have left since Jan. 1, 2023.
Significant online companies have taken steps to move out, including President Trump's Trump Media, TripAdvisor, Trade Desk, and Roblox.
The Simon Property Group, the nation's largest mall owner, announced in March that it was leaving, stating that the court was involved in "meritless litigation" and conducting "judicial interpretation without a clear statutory bias."
Delaware lawmakers have been pushing for legislative reforms to retain businesses and attract new ones.
The state Senate passed a bill unanimously to revise the evaluation process for deals between corporations and major shareholders. If approved by the House, the measure will be sent to Democrat Gov. Matt Meyer, who reportedly supports the legislation.
But critics of the legislative changes say the move is window dressing and doesn't change the fact that activist, left-wing, judges dominate the state's judiciary.
In 2023, The Wall Street Journal published an article, co-authored by former Attorney General William Barr, lambasting Delaware for embracing DEI, environmental, social, and governance policies and attempting to force them on corporations.
Others have pointed to the Delaware Superior Court's actions that forced Fox News into an unheard-of $787 million settlement with a voting company over its reports relating to the 2020 election.
Viet Dinh, Fox's chief legal officer, said the court's rulings "called into question the fundamental fairness and integrity of the Delaware civil justice system."
Last year, The Hill reported that major corporations are fleeing as a result of its highly politicized agenda.
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