Delaware lawmakers have come together in a bipartisan effort to change corporate law to avoid more companies moving operations out of the state. This comes after Elon Musk moved Tesla (TSLA) and SpaceX out of Delaware following an investor-led lawsuit over his $55.8 billion pay package.
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With this change, Delaware lawmakers hope to convince several companies to continue operations in the state. The corporate laws in Delaware have long attracted major corporations, but that’s changing as its Chancery court has increased rulings against companies and in favor of investors. Meta Platforms (META) and Dropbox (DBX) are among the companies planning to leave the state.
With U.S. states increasingly competing to attract corporations, Delaware can’t sit by and watch a major source of its revenue depart. The new bipartisan bill could help alleviate those concerns and politicians are pushing to pass it fast. In fact, state lawmakers didn’t even consult the bar association, which typically oversees corporate law changes, when drafting the bill.
What This New Bill Means for Elon Musk & Tesla
Delaware Senator Bryan Townsend, the new bill’s sponsor, notes it isn’t retroactive and won’t change the rulings against Elon Musk and Tesla. That’s despite Tesla still appealing the court’s decision after two attempts to have it overruled.
Townsend also claimed the new bill “has nothing to do with Elon Musk.” While it’s true the bill doesn’t affect Musk or Tesla, his decision to leave Delaware after losing the pay package lawsuit sparked the state’s current troubles.
Is TSLA Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Tesla is Hold based on 13 Buy, 12 Hold, and 10 Sell ratings over the last three months. With that comes an average price target of $340.50, a high of $550, and a low of $24.86. This represents a potential 4.31% downside for TSLA stock.
