By Sara McBride
Elon Musk’s brain implant company, Neuralink Corp., changed the location of its business incorporation to Nevada from Delaware, taking steps to cut ties with a state where Musk has suffered major legal setbacks: one over payment and another over acquisition of Twitter.
The change was completed Thursday, according to the Nevada secretary of state’s office and a notice sent to the company’s shareholders. Last week, a Delaware judge struck down Musk’s Tesla Inc.’s $55 billion pay package. In a post on X, the social network he owns, Musk advised founders not to incorporate in the state.
The notice sent to shareholders, which was reviewed by Bloomberg, informed them that their shares outstanding in the Delaware corporation would now be incorporated into the shares outstanding in the Nevada corporation.
Neuralink’s lawyer, Philip Mao, declined to comment.
Last week, Musk tweeted that Neuralink had implanted a device in a human patient for the first time. The startup’s technology aims to help people with traumatic injuries operate computers using only their thoughts. Over time, Musk has said that Neuralink’s device will give people “control of their phone or computer, and through them, almost any device, just by thinking.”
Neuralink is not the first company Musk has rejoined outside of Delaware and it may not be the last.
Musk previously moved X’s incorporation from Delaware to Nevada when he changed the company’s name to Twitter. Nevada corporate laws offer more protection to executives against investor lawsuits.
Tesla, which is based in Austin, was incorporated in Delaware in 2003. Last week, Musk promised to try to move Tesla’s incorporation from Delaware to Texas, but such a move would require a shareholder vote.
Musk has a long history of legal disputes in Delaware, known as the country’s charter capital. The state is the corporate home of more than 70% of Fortune 500 companies, and its chancery court judges are recognized as business law experts who can hear fast-track cases. Most high-profile M&A disputes are litigated in the state in bench cases. Even foreign companies come to Delaware to have their corporate disputes resolved.
Two years ago, a Delaware judge rejected an investor’s lawsuit challenging Musk’s $2.6 billion acquisition of renewable energy provider SolarCity, finding that the billionaire businessman did not improperly force his fellow directors to agree. an overrated SolarCity buy.
Later in 2022, Musk was not so lucky when he attempted to back out of his bid to purchase the social media platform once known as Twitter. He was repeatedly dealt setbacks in pretrial rulings by Judge Kathaleen St. Jude McCormick, the same judge who would strike down his 2018 salary plan.
First published: February 10, 2024 | 7:03 a.m. IS