Meta in Talks to Reincorporate in Texas or Another State, Exit Delaware | Hacker News Reader

Meta in Talks to Reincorporate in Texas or Another State, Exit Delaware

wsj.com

15 pointsperihelions21 comments

Wow, this was really Delaware's game to lose and it looks like they might lose it.

Incorporating in Delaware was the "nobody gets fired for buying IBM" of corporate governance.

For those of us who haven’t paid the WSJ, what’s Delaware done?

Oh, so Elon got told by Delaware that his salary was fiscally irresponsible and so he took his ball and went home. And now Zuckerberg wants to do the same.

My understanding is that it was equity bonuses based on targets that were considered basically impossible to hit at the time. They hit the targets. I don’t really understand why people think he shouldn’t get the equity. Can you explain how you feel about it?

The company offered long odds on a check they thought they would never cash so they didn’t fight about it. Every con job involves the mark believing they have power over the artist.

Or if you don’t think he’s a con artist, it’s like that sweepstakes that offered a fighter jet. From their perspective it was hyperbole.

So if they make a mistake they can have a court reverse it? That doesn't seem very rule-of-law-y.

Did Musk misrepresent somehow? This line of thinking could bear weight if he deceived investors into thinking it was very unlikely when it really wasn't. Did that happen? I haven't heard anything like that.

Tesla's investors voted again last year and 70% confirmed they still wanted to award the original package (the court still blocked it, though, btw). Does that change your view?

It changes my opinion about something alright.

You know he owns 12.8% of the shares right? Possibly more when that vote happened. So 57.2% voted for him, not counting his shares.

Elon is allowed to vote in his self interest. If he owned 51% this should still stand. The fact that he had a majority yes without his own vote makes this doubly true.

He was literally sleeping at the factory, doing everything he can to get Tesla to be outselling Toyota Corolla, which was considered absolutely insane. It’s still an insane goal.

i was really impressed by this back in the day. given what i know about him and things he done, it just smells like really good marketing material

if i own a factory i'm definitely sleeping there one night and making sure it's in every newspaper that i did it. instant hero.

No amount of marketing gives a company a $750B market cap.

Neither does any sane valuation of the company.

Are you saying Elon conned Tesla into 10 x valuation and they feel scammed now? Rather would go down to 0.1 again than pay up?

The issue was that at the time not only were the targets achievable but that internal forecasts already had them on track to achieve those targets and in a faster time frame than Elon presented in his package demand.

Basically, it was like a Qb demanding a huge paycheck to continue playing... while his team is already ahead, in possession, and only needing to run out the clock to win.

Internal forecasts predicted that Tesla, with a market cap of ~40B in March 2018, would have a market cap of 750B before the end of 2020?

What's your source on this?

Documents released at trial. Also, the market cap milestone was $100 billion. $750 billion was the stretch goal. Internal forecasts had Tesla on track to meet at least the first milestone the end of 2019 (they actually missed that forecast by about 3 weeks) just based on organic growth. Based on Musk's forward-looking statements back then that Tesla would double in size every year, basic math and common sense indicates Tesla forecast hitting all of the remaining milestones by 2025. Or in other words, at the time the pay package was negotiated, Tesla had already forecast reaching all of the market cap targets. (The judge refers to the failures to disclose this information as "material misstatements" in her ruling.)

Most of the remaining targets were revenue/earnings targets that Tesla goosed by pulling forward revenue from future quarters. This is the reason Tesla had all those quarter-end and year-end all-hands-on-deck crunches when the pay package was in effect but none since it was thrown out.

Note that none of the above is illegal. If an independent board had negotiated the pay package, it would have been fine. But no independent board would have ever negotiated a pay package giving away that much additional equity in a publicly-traded company, because there is no way an independent board could demonstrate that they were acting in the best interests of the other shareholders in heavily diluting those other shareholders' interests in the company.

Ridiculous. If the market thought that was realistic it would have been priced in.

Some more discussion: https://news.ycombinator.com/item?id=42890960

These oligarchs seem to be aiming to be above the law.

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