On the map, the United States remains a unified federation; but in the realm of business logic, we are witnessing the US tearing itself apart into "two countries." In the early winter of 2025, Coinbase, the largest cryptocurrency exchange in the US, officially began the process of moving its registered office from Delaware to Texas. In the long narrative of American business history, it's hard to ignore the resolute sense of tragedy behind this decision—it's far more than just a change of administrative address; it's more like a spiritual act of "patricide" and "abdication." For the past century, Delaware has been the undisputed "Mecca" of American commercial civilization, the highest symbol of the industrial age. The term "Mecca" signifies not just a geographical coordinate, but also the endpoint of a belief. On this narrow peninsula, less than two thousand square miles in size, lie more than 66% of the Fortune 500 companies in the United States. In the traditional narrative of Wall Street and Silicon Valley, a great company may be born in a California garage, but its soul (legal entity) must reside in Delaware. There, one finds the oldest and most professional Court of Chancery in the nation. For investors and professional managers of that era, Delaware represented an almost religious certainty—the most robust fiduciary responsibility, the most predictable case law, and the sense of security considered the cornerstone of business. But now, this rock, bearing a century of business faith, has begun to show alarming cracks. Coinbase's departure is not an isolated case. If you look at the list of those who have migrated, you'll find it filled with some of today's most restless and wildest names. Elon Musk is the primary driving force behind this exodus. The catalyst for this happened a year ago. In a world-shaking ruling, a Delaware judge decisively stripped Musk of the $56 billion compensation package he had earned over a decade. Even though he miraculously achieved the performance targets that Wall Street initially considered impossible, pushing Tesla's market capitalization to a trillion dollars, the judge still tore up this outcome-based contract with a single ruling, citing "insufficient board independence." This ruling thoroughly enraged Silicon Valley's new elites. Then, in a fit of anger, this "Iron Man," along with Tesla and SpaceX, resolutely sailed south to Texas, much like the famous Mayflower. Now, unicorns like Coinbase and TripAdvisor have followed suit, joining the ranks of those trying to escape. This series of departing figures heralds the twilight of an old era. Once, large companies stayed in Delaware seeking protection, because it represented mature rule of law and rationality; now, for survival and rapid growth, the top companies believe that only by fleeing Delaware can they be safe.
For freedom, blood must be shed
In the cruel laws of the business world, freedom is never free. But for Musk and Coinbase, the price of this freedom is staggeringly high.
In the public's general perception, changing a company's registered address seems like a simple administrative procedure—filling out a few forms and changing the address. But in reality, it's far from a "relocation" that can be settled with tens of thousands of dollars in administrative fees; these giants must pay a staggering bill.
First, they must hire top-tier law firms. Firms at the very top of the pyramid, such as Wachtell and Sullivan & Cromwell, already charge partners fees exceeding $2,000 per hour.
The bill for drafting just a few hundred pages of proxy statements that comply with SEC regulations can easily exceed $5 million. Secondly, there's the expensive campaigning. To convince skeptical institutional shareholders like BlackRock and Vanguard, companies need to hire professional proxy solicitors. For mega-cap stocks like Tesla, this "vote-getting fee" alone can reach millions of dollars, requiring months of roadshows and lobbying, much like a presidential campaign. Most critically, there's the potential risk of default. Legal teams need to work day and night reviewing tens of thousands of business contracts because a change of domicile could instantly trigger "change of control" clauses in many bond agreements. To obtain waivers from creditors, companies often have to pay additional fees. According to market practice, this fee typically ranges from 0.25% to 0.5% of the total bond amount. For giants with massive debt, this means the instantaneous evaporation of tens or even hundreds of millions of dollars in cash flow—valuable funds that could have been used for R&D or buybacks, now becoming huge sunk costs. Given such a heavy price to pay, why would they rather "cut off an arm" than leave? The answer lies in the shadows beneath Delaware's glamorous legal facade. For today's tech giants, Delaware is no longer a safe haven, but a hunting ground strewn with traps. Here, a large, secretive, and greedy group thrives—the Plaintiffs' Bar. On Wall Street, it's jokingly referred to as a "merger tax." Statistics show that at its peak over the past decade, more than 90% of mergers and acquisitions worth over $100 million faced litigation in Delaware. These lawyers have no interest in corporate governance; like sharks smelling blood, they only need to hold one share of a company's stock. Once the company releases a major announcement, they immediately file a class-action lawsuit for "insufficient disclosure." This has long since evolved into a standardized "extortion assembly line": sue, obstruct transactions, and force companies to settle. Most companies, to avoid delaying the transaction process, have no choice but to pay this "toll," which typically amounts to millions or even hundreds of millions of dollars. Dell, Activision Blizzard, Match Group… countless large companies have been "extorted" in Delaware's case law. Here, companies are no longer legally protected clients, but rather legally preyed upon. This kind of bloodsucking reached its absurd peak in the Tesla payroll case. When a Delaware judge ruled Musk's compensation package invalid, the plaintiff's legal team filed a claim for 29.4 million Tesla shares as a winning fee. Based on the stock price at the time, this fee was worth a staggering $5.6 billion. $5.6 billion is enough to directly buy Macy's, the largest department store chain in the United States. At this moment, the true intentions are revealed. This is no longer a manifestation of legal justice; it is a blatant plunder of the creator of wealth. This devastating blow completely disillusioned Musk and sent a chill down the spines of Coinbase, who had been watching from the sidelines. Coinbase's management was acutely aware that while the knife hadn't yet fallen on them, remaining in this old world rife with "professional plaintiffs" and "astronomical legal fees" meant being exploited was only a matter of time. The giants did the math: current legal, administrative, and public relations fees, while often in the tens or even hundreds of millions, were only short-term pain. Continuing in Delaware, in this legal ecosystem, losing control of the company, and being forced to endure endless litigation and extortion would be an incurable "cancer." For freedom, blood must be shed. The old world's measuring stick cannot measure the ambition of the new world. If the exorbitant "ransom" was merely a painful blow to Musk and his ilk, then the fundamental conflict at the core of Delaware's legal logic was the root cause of their suffocation. This is far more than a debate over legal clauses; it's the ultimate clash between two business civilizations. For the past century, Delaware has held its business throne because it forged a tacit golden agreement with the American business community—the Business Judgment Rule. Its subtext is that as long as the board of directors doesn't embezzle or break the law, judges will never interfere with how you do business. This is the ultimate respect for entrepreneurship and the cornerstone of American business prosperity. However, in recent years, this yardstick has become distorted under the erosion of time. With the ever-expanding weight of institutional investors, Delaware's gavel has increasingly slid towards another extreme—the Entire Fairness Standard. This is a term that sends chills down the spines of every Silicon Valley founder. Its subtext is: "I don't care if you've created a business miracle; if the process doesn't meet my requirements, your success is meaningless." Musk's $56 billion compensation, which was written off, is a victim of this microscopic examination. In that lawsuit, despite Tesla achieving the most phenomenal growth in human business history, and despite shareholders making a fortune, the Delaware judge coldly ruled Musk's compensation invalid. The reason given was simply that the board members had too good a relationship with Musk, and the process wasn't "perfectly independent." This arrogance of prioritizing process over results might be a safe haven for traditional companies like Coca-Cola, managed by professional managers; but for new species like Coinbase and Tesla, which rely on their founders to drive exponential growth, it's a fatal shackle. The old world's yardstick can no longer measure the ambitions of the new world. Delaware judges can read the financial statements of steel, oil, and railroads, but they struggle to understand why Musk's personal brand is worth $50 billion. While Delaware is preoccupied with ethical scrutiny, Texas has pragmatically presented an ambitious "partnership agreement." This isn't just an empty "Welcome to Texas." In September 2024, the Texas Business Court officially opened. This is not just a new institution, but a precise strike by Texas against Delaware's vulnerabilities. It only handles high-value cases. According to the bill, the court has exclusive jurisdiction over commercial disputes involving more than $5 million; for publicly traded companies, only cases involving more than $10 million are eligible. This means that shareholder harassment lawsuits are directly excluded. Even more disruptive is the judge appointment process. Unlike Delaware's Supreme Court justices, who serve 12-year terms and come from legal families, Texas commercial court judges are directly appointed by Governor Greg Abbott and serve only two-year terms. This signifies an unprecedented tacit understanding between the judiciary and the executive branch on the goal of "developing the economy." If a judge rules against the business environment, he could lose his job two years later. Texas's message is very clear: "Here, we don't teach you how to be a person, there's no fatherly influence. We only protect contracts. As long as you bring jobs and growth, we'll protect you." The "founder model" represented by Coinbase and Musk is no longer willing to bow to the "managerial model" represented by Delaware. They've had enough of being treated like wild beasts to be guarded against. So, they chose to pack their bags, leave that exquisite but suffocating greenhouse, and head towards that rough but wild wilderness. This may not mean the end of Delaware. For a long time to come, it will remain home to Coca-Cola, Walmart, and General Electric. For these "old aristocrats" who crave stable dividends, value ESG scores, and are accustomed to professional management, Delaware's meticulous and cumbersome rules remain the best safety net. But for another group, the air there has become so thin it's suffocating. We are witnessing America tearing apart into "two countries." One, represented by Delaware and New York, emphasizes distribution, checks and balances, and political correctness; it's like a refined museum, orderly yet exuding a stale, stagnant atmosphere. The other, represented by Texas and the New Frontier, emphasizes growth, efficiency, and even a kind of savage vitality, dangerous yet full of possibilities. The departure of Coinbase and Musk is just the beginning. They were like canaries in a coal mine, sensing the tremors deep underground before anyone else with their keenest sense of smell. Of course, this migration was not without risk. The newly established commercial court in Texas had not yet undergone the stress test of a major economic crisis, and its power grid remained fragile even in a blizzard. No one dared to guarantee that the next century's commercial legend would be born here. But this is precisely the most fascinating and cruel aspect of business—it never promises certainty; it only rewards those who dare to bet on uncertainty. In this high-stakes gamble on the future, capital cast its most honest vote with its feet. It tells us that when the old world order begins to solidify into a constraint, the instinct for innovation always runs towards that field, even if barren, but one that allows for unbridled growth.
YouQuan
Brian
Hui Xin
Joy
Jasper
Catherine
Jixu