Transcription
I absolutely love this headline: Why are Delaware Democrats trying to give Elon Musk $55 billion? They are more important things than the state's corporate franchise fees. Let me give you the simple version, my friends.
The latest news is that Dropbox is officially leaving Delaware. They filed; they're gone. A wave of corporations are leaving Delaware.
For those that are familiar, the story starts with Elon Musk, who was entitled to a multibillion-dollar—$55 to $70 million—pay package for Tesla. The company, of course, was incorporated in Delaware. Elon hit certain milestones; he was supposed to get paid out. It got blocked. A judge said, "You know what? I've decided your pay package is no good; you can't have it." So Tesla said, "Let's ask the shareholders once again: should Elon get his pay package?"
And now enters little old me. So I get a notification that I need to vote on this because I am a Tesla shareholder—and a bitty one, not the biggest—and they said, "Do you think Elon should get paid?" And I said, "Of course he should. He's leading this company to success; he should make the money off of it." Now I know Tesla stock is down, but I'm still way up because I bought Tesla when it was like a hundred and something, and then it skyrocketed. Now we're seeing a major correction. Whatever the point is, Elon, as the CEO, has built a successful company, and I want to make sure he gets paid so he continues to do this. When Delaware blocked him, they put my money at risk. This scumbag judge!
So Elon says, "We're out; we're going to reincorporate in Texas." All of a sudden, tons of companies panicked. One progressive Democrat judge denying Elon Musk for stupid, psychotic reasons twice, and major companies said, "We can't be here if one little old judge can destroy our company with the flick of a pen. We are screwed." They are jumping ship. Now the state is in freefall, and they're in sheer panic. And the reporting is Democrats are trying to jump in to restore his pay, but it is too late. The breaking news, of course, is Dropbox has completed its reincorporation from Delaware to Nevada, and we are seeing now Walmart is preparing to leave Delaware. Oh, it feels so good to watch these people get some comeuppance. We're winning! Now what are they resorting to? I don't know. They're setting fire to Tesla vehicles, shooting at them with guns, and threatening the life of Elon. When I look at all this stuff, you know, it makes me worried because Trump, Elon, all of us—we're winning at the administrative level. So these far-leftists are resorting to violence, I believe. As we get more stories like this, they're going to continue.
Let's grab the story, but before we do, my friends, head over to castbrew.com, take a search, grab yourself some Misty Mountains. Look at that, $12.99 a bag Costa Rican blend. We do have a bunch of others, of course. Appalachian Nights is everybody's favorite. And become a premium member of Rumble. Use promo code tim10. Check out our Green Room podcast Monday through Friday—behind-the-scenes, uncensored conversations.
Here's the story from prospect.org. They say, "For over a century now, Delaware has been the home of most large American corporations. The state government has set up an incredibly corporate-friendly regulatory, tax, and legal regime, and so big companies locate their official headquarters there. Many trusts and opaque paper shell corporations are Delaware-based as well, for the same reason. It's a classic race-to-the-bottom dynamic where, because the federal government does not set a consistent baseline, states competed as to who could pander the hardest to Big Business, and Delaware hit bottom first. Most Fortune 500 companies locate there, and in return, the state gets about a third of its budget from corporate franchise fees and taxes. But Delaware incorporation laws also provide some rights to shareholders. While shareholders have extremely limited ability to sue over the business judgment of corporate managers, corporations must prioritize them and treat them fairly due to these precedents."
Elon Musk has been losing repeatedly in Delaware Chancery Court over a proposed pay package for himself worth an estimated $55 billion. Musk responded by moving Tesla's headquarters. Let's talk about what actually happened that they're covering up. It was apparently like one dude with a handful of shares—literally like 10 shares—who sued, and a judge sided in this guy's favor, blocking the pay package. So, in response, Tesla held another vote and said, "You, the shareholders, what do you think?" And overwhelmingly, they said, "Give the man his money"—twice now. And then the judge came in again and said, "No, now hold on there a minute. If the shareholders vote to give Elon his money, how could the judge block it twice?" And why don't they point that out? They're trying to make it seem like Elon—like the shareholders of Tesla—were mad at Elon and didn't want him to do this. No, it's one crackpot judge.
They say, "As a result, legislators from both parties, in short, panicked, as CNBC reported. Musk's own lawyers drew—assuming—reform into state law that would weaken protections and powers for small investors. Delaware state government, which is fully controlled by Democrats, fears the prospect of Trump leading a stampede of businesses out of the state and is reportedly supporting the bill. A ruling earlier this month in a case involving TripAdvisor, moved to Nevada, would make it easier for companies to leave Delaware and added fuel to the possibility. Clearly, Democrats want to head off a massive hole developing in the state budget and so are poised to give Corporate America whatever they want. But should this pass, it'll be an astounding betrayal, not just of the US, but of Delaware itself. Cry more about it. Cry more! If a company is based in Delaware and they say, 'Bye-bye, we're out,' you can't do anything about it. So cry more! This is what it's supposed to be. We got all these different states, and they can operate how they want. This is why I've been ragging on West Virginia over their Uber laws. West Virginia is telling us right now that our freelance reporter—we have no idea when he works, we have no idea where he's going to be, he can sell to us when he feels like it, he's not on a retainer—they said he's a full-time employee. I said, "You will not get one penny from me, you scumbags!" I've talked to people in government and I said, "I ain't paying it; it's not going to happen." Let's play, because I will shut this company down before you take one penny trying to steal from me. You want to play ball? But you know what's messed up? Regular small businesses—like small businesses in general—they can't handle this. The state comes at them and says, "Pay up or else." They say, "We can't afford it; it's probably going to cost us more money to fight this than to just pay it," and the state is hoping they can rip us off and steal that money from us, claiming that a freelance reporter who is 1099 is a full-time employee. So I say, "I can go to any state I want; I don't need to operate here. You want to play ball? We'll play ball. You want to take one penny from me? I will shut this down, and I will operate out of a van in Texas before I pay you off from trying to steal from me."
I digress. In Delaware, they're seeing this mass exodus. We have this Eliot blog—I don't think it's—it's not related anyway to Elon; it's a different guy—but he mentioned several companies: Trade Desk, Activision, Mellis, TripAdvisor. He says there are more examples beyond Tesla. He writes, "Examples of problems in Delaware causing companies to leave. Part of the concern in Delaware, as a Wall Street Journal opinion piece recently put it, is the likelihood of expensive, meritless, or value-destroying litigation leads public companies in Delaware to avoid deals they would otherwise make. The other part is a few more extreme Delaware activist judges who apply creative writing to interpreting the law. The most famous example is the court invalidating Elon Musk's board and subsequently a shareholder-approved compensation package. The ruling was viewed as political activism by many versus following any form of legal framework. Tesla subsequently reincorporated to Texas with 84% non-roller shareholder support." Let me stress: the board said, "Pay Elon"; the judge said, "No"; the shareholders then voted and said, "Pay the man," and the judge said, "No."
Trade Desk: Delaware Court required special committee approval for controller transactions that were fully disclosed at IPO and had operated without challenge for years. Activision: Delaware Court invalidated merger approval process on technical grounds, despite 98% shareholder approval and no evidence of harm. Mellis company: Delaware Court invalidated long-standing stockholder agreements between the company and its founder that were disclosed at IPO, requiring a legislative fix. And for TripAdvisor: Delaware Court ruled that merely reincorporating to Nevada required special committee approval and minority shareholder vote because reducing litigation exposure was deemed a non-ratable benefit to the controller.
So here's what's next: Walmart is mulling a Delaware exit. Oh, boy! A small group of corporate attorneys last month told Delaware legislators that blue-chip companies, including Walmart, were considering moving their corporate legal residencies out of the state. And before reported the news is said to have Delaware's political and business leaders reeling. The small state of Delaware, with just over 1 million people, derives more than one-third of its state budget from corporate legal fees, not to mention the far greater impact corporation business has on the economy. But now many businesses are fleeing the state due to its woke policies, left-leaning judges, and anti-business environment. In late January, Meta confirmed it was in talks with Texas about reincorporating in that state and pulling out of Delaware.
Let me tell you how it works, my friends. Let me tell you how it works right now. This is important. West Virginia's legislature has passed a ban on artificial food dyes—huge, massive success—but big food producers at the national level are threatening West Virginia, saying, "We'll leave if you don't want us to sell our food here. We'll leave." That's going to be a challenge for the governor because he could still veto this. We need support; we need people to say, "We are going to make sure the state can still sell food and make money." I think it should be done. I think food dyes—artificial food dyes—should be banned. Use carrots, use blueberries, whatever beta-carotene. Stop using this garbage. Clean food. I think it'll be a tremendous benefit to West Virginia, but that's the risk right now. Big business says they're going to leave.
For Delaware, what people need to understand is this is not just about business. They have crazy trust laws; they want all wealthy people to set up there. I had a lawyer advise me; he said, "Tim, you got to set up a trust in Delaware because the way it works is you put all of your investments into the trust," and I don't know how it works; we didn't do it. I think it's scummy, and I'm glad we didn't because now look what's going on. The way it works is when a trust makes money, there's no taxes to be paid; it's not—it's not a legal person entity. So I could be wrong about this, but I think the general idea was you put a bunch of money in the trust, the trust then invests in various stocks or whatever, the value goes up, there's no taxes to be paid because there's no income gained by anybody, no capital gains. Then when you pull money out of the trust, you pay tax on it. So, in the long run, no taxes are being paid, and you can make money—it's $5,000 bucks a year, whatever—for the special trust system, and Delaware does it to shield wealthy people from having to pay taxes through normal operations. Delaware is a scumbag state, and that's just the way it is. But I tell you this: competition is the name of the game, and that's the way it should be. When they decided to play this game, this is the—this is the repercussions; this is what you're going to get.
So I say this in West Virginia: well, people need to understand about business when they're saying Facebook is negotiating with Texas. I've got people from government begging me not to leave. I shouldn't be so—to me, many of them are saying, "Hey, Tim, we'll figure this out; please don't leave." I shouldn't be so—what—what are we worth to West Virginia? Well, not a lot revenue-wise, but PR-wise, it can be way worse. When I tweeted that we were mulling leaving West Virginia over their Uber laws—and we still are—I was slammed in every direction from every politician—not every, but many politicians in the state—even the governor, excuse me, was tweeting about it. They were saying, "Give us a chance to fix all of these things. We just got in; it's been a—it's been a Democrat state for so long; we're going to fix this." Well, the state then still followed through with enforcement action against us, which I believe is criminal harassment—maybe I'm exaggerating, but harassment—claiming that a dude who lives in New York who periodically pitches to us video he has that we can buy is a full-time employee and we owe back taxes and interest. It's them just trying to steal money from us. So if you want to play that game, we will move this company out. Now the risk to the state is the PR damage if I make that move, and even by complaining about it now, there's going to be big companies that are like, "I don't know if we should operate in West Virginia because look what's going on with Timcast."
Now we don't generate nearly as much money as a large food producer, but we generate probably the largest amount of attention. I mean, I got to be honest, we might generate the most amount of national attention for the state. It's kind of weird. I mean, obviously, you've got politicians—I mean, like, is a media entity. How many other big podcasts in the country? How many other top 30 podcasts are headquartered in West Virginia? Maybe there's a few; I don't know. But um, we're one of the biggest. So when I say the state screwing us over and trying to steal from us, people say, "I'm not going to go there," and a lot of people had moved to the state because we saw opportunity here. Now I trust and respect the governor; I've met him personally before he was governor. So hopefully, they do the right thing. I don't want any special treatment, but understand this about Delaware, about West Virginia: when you're a big company, you are talking directly with the state; you are talking directly with the leadership. Why? For the county that we are in, we do generate a lot of money, and we're probably one of the biggest taxpayers—not the biggest because we're not that big—but we're big. And so the county loves that we're here; the state does love that we're here. But let's be real: we're not—we—we make a lot of money, but we're not like the biggest company in West Virginia or anything like that. The PR issue is massive, and they don't want people ditching the state or freaking out over these laws. So what ends up happening is politicians contact me and say, "What can we do?" And my response to all of them is, "I don't want favors, and I don't want special treatment. You fix the law; otherwise, we're finding somewhere else to go."
Now we do love the artificial—uh—uh—dye ban in foods, and that is good reason to stay. We can fight through these laws; we can challenge the state over falsely coming after us for back taxes, and that is scumbaggery to the highest extent. But maybe we leave. Maybe we leave. The Democrats in Delaware are feeling that pain. The only reason I feel bad in West Virginia is the Democrats have been defeated; it's now a super-majority state, but a lot of these Republicans are still acting like Democrats. The artificial food—uh—artificial food dye ban is huge and shows the state's moving in the right direction. So maybe what we need is for the state to fix this law and stop harassing us and trying to get us to pay money we don't owe. I get these union people—all these scumbags messaging me being like, "You just don't want to pay benefits to people who deserve it." Screw off! I'm going to spare the profanity. These people—these union—gangsters want to force you to be an employee so they are guaranteed union fees in states where you don't have a choice and you are forced to work for—for the union. Screw that! A dude who does not live in this state who films whatever protests he wants whenever he wants is not an employee. But if you want to play that game, okay, we'll stop paying for any of his content, and he'll have no job. It's insane! The dude sells to whoever he wants. Eliot, he goes and covers whatever he wants whenever. We don't want to buy that; we do want to buy that. They call him a full-time employee. We got two IT guys at a state on retainer; they work randomly. We have retainers because we want to make sure we have the time allotted. Full-time employee? One guy's full-time; one guy's not. We said, "How come you're saying that guy is—that guy isn't?" They: "No." And I'm like, "Okay, you're lying. Is it because one guy got paid more in the year?" Our IT guys are not employees; we're not an IT company. They don't work on a schedule; they don't have to be anywhere; they can work wherever they want, whenever they want; they can outsource whoever they want. It is an IT company, and the state of West Virginia said, "Don't—no—don't care; pay up or else." And I said, "Or else—else—or else! Let's go, baby! You want to go to war? We'll go to war. Screw you!"
Back to Delaware. Their game—the game they're playing—is way bigger. Who am I? Some guy in West Virginia, whatever. Delaware, you got all the big corporations, and they're going to jump. Good for them! I'm on their side. The state is a bunch of scumbag activists, and they want to burn down small business; they want to burn down big business; they want to gut people's—uh—bank accounts, whatever it is they're doing, then people will leave. Don't go to Delaware where the activist judges are going to screw you over. Because I'll tell you this: when I was first setting up the incorporation for Timcast, we were in New Jersey, and I got told by my accountant, "Do Delaware. They say, 'Register in Delaware; pay for a registered agent; you're going to save so much money.'" And I said, "That sounds like scumbaggery." And they said, "It's totally normal. You operate nationally; you're a podcast; people are—of the country are customers; you don't need to be in New Jersey; you're only there for your studio. So the company should be in Delaware; you'll pay less taxes." And I said, "I'm not going to do that. I live in New Jersey; I pay taxes where I live." We left New Jersey—scumbag state—for a lot of reasons. We went to Maryland. We said, "We're going to operate in Maryland." Maryland actually wasn't bad to us, seriously. The gun laws are garbage, but Maryland wasn't bad to us. We only relocated to West Virginia because we—we—we wanted larger property at lower cost, and it turned out the taxes were worse. We tolerate it because the gun laws are better, security is better, and we believe in the new administration and the moves they're making. But now you want to come at me like this after everything good I said about this place? You have the nerve to put a knife in my back? So I take this stuff personally, and I gloat when these people cope and see—about big corporations ditching Delaware. It feels good. I'll tell you how I feel.
We could have stayed in Maryland. I don't like the state, but they were good to us; they didn't bother us; the taxes weren't so bad. We were 10 minutes from Virginia and West Virginia—not even 10, like literally a minute—right on the border, and so we could go wherever we wanted. But the gun laws were really bad, and the property is more expensive. So we were like, "We can get a much bigger property and build a bigger space if we leave." Granted, we got like 11 acres or so in Maryland; it's just the property is on a mountain, seriously. So—and I know it's an East Coast mountain, so calm down, West Coasters. So we were like, "It's better just to move and relocate and make a different business here." We go to West Virginia; we tell everybody to move here; we invest in property in Martinsburg; we try building things out, and what happens? The state comes to us and says, "We're going to take from you high five figures that they're—they have no right to; they're going to lie and enforce a fake law against us," and they keep pushing, and they keep pushing. So West Virginia, man, I want to give the new administration a chance, but man, am I just so sick of this. Good luck, Elon, and screw you, Delaware. We'll work out our problems in West Virginia, but in the meantime, I hope Elon wins. I hope Delaware cries more about it later. Stick around; we got more shows coming up. We'll see you all at Timcast IRL. Follow me on X and Instagram at timcast.