EV major Tesla (NASDAQ:TSLA) will hold a shareholder vote to transfer its state of incorporation to Texas from Delaware, the company’s CEO Elon Musk stated in a post on X. This news comes just a day after a Delaware judge voided Musk’s $56 billion compensation package.
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Following the judgment, Musk said in a post on X, “Never incorporate your company in the state of Delaware.” The billionaire also took a poll asking if Tesla should now incorporate in Texas. An overwhelming 87% voted in favor of the shift.
After the vote, Musk posted on X that TSLA would hold a shareholder vote.
Tesla’s Gigafactory is located in Texas, where it is also building a lithium refinery. Musk’s other companies, including SpaceX and The Boring Company, have operations in Texas.
According to a Reuters report, citing data from Harvard Business Services, more than 65% of Fortune 500 companies and around 50% of all publicly traded companies in the U.S. are incorporated in Delaware, as they find the state’s legal framework and tax policies business-friendly.
Tesla is Being Sued By Counties in California
Meanwhile, in another setback for Tesla, the company is being sued by 25 counties in California for mishandling hazardous waste at its facilities, including improper labeling and disposal of various materials. The lawsuit was filed after months of discussions, as it failed to reach any kind of settlement.
According to a Reuters exclusive, district attorneys in different counties are seeking injunctions and civil penalties of up to $70,000 per violation per day.
Is Tesla a Buy or Sell?
Analysts remain sidelined about TSLA stock with a Hold consensus rating based on 12 Buys, 16 Holds, and four Sells. Over the past month, TSLA has plunged by more than 20%, and the average TSLA price target of $220.98 implies an upside potential of 18% at current levels.
