Billionaire entrepreneur Elon Musk applauded Latin American e-commerce giant Mercado Libre for relocating its corporate domicile from Delaware to Texas. The move follows a growing exodus of major corporations fleeing Delaware’s increasingly activist judicial system.
Mercado Libre announced its plans in a recent SEC filing. The company, valued at over $100 billion, will propose the “redomestication” to shareholders during a meeting on June 17. Musk reacted by posting on X, “At this point, any lawyer recommending incorporation in Delaware is committing malpractice.”
Delaware, once known for its business-friendly environment, has faced backlash after a state judge nullified Musk’s $56 billion Tesla compensation package—despite it receiving shareholder approval twice. That ruling and similar court decisions have driven at least 20 major companies to announce departures this year.
Other notable exits include AMC Networks, Madison Square Garden Entertainment, Dropbox, and Pershing Square Capital Management. President Donald Trump’s Trump Media, Walmart, and Meta are also reportedly considering moves.
Critics argue Delaware courts have become hostile toward businesses by promoting DEI and ESG policies and engaging in politically motivated rulings. Former Attorney General William Barr co-authored a Wall Street Journal piece condemning the state’s legal shift. Fox News was also forced into a $787 million settlement under the same judicial system, drawing further criticism.
The trend signals a broader corporate rejection of progressive state policies. Texas and Nevada are emerging as preferred alternatives for companies seeking fairer legal environments and less regulatory interference.
