Text: Sleepy.txt On the map, the United States remains a unified federation; but in terms of business logic, we are witnessing the United States tearing apart into "two countries". In early winter of 2025, Coinbase, the largest cryptocurrency exchange in the United States, officially began the process of moving its registration from Delaware to Texas. In the long narrative of American business history, it is hard to ignore the sense of resolute tragedy behind this decision—it is not just a change of administrative address, but more like a spiritual "parricide" and "abdication". For the past century, Delaware has been the undisputed "Mecca" of American commercial civilization and the highest symbol of the industrial age. The term "Mecca" signifies more than just a geographical coordinate; it represents the culmination of a faith. On this narrow peninsula, less than two thousand square miles in size, lie over 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 garage in California, but its soul (legal entity) must be located in Delaware. It boasts the oldest and most professional Court of Chancery in the United States. For investors and professional managers of that era, Delaware represented an almost religious certainty—it had the most robust fiduciary responsibility, the most predictable case law, and a sense of security that was considered the cornerstone of business. But now, this rock, which has carried a century of commercial faith, has developed shocking cracks. Coinbase's departure is not an isolated case. If you look at the list of those who have migrated in this wave, you will find it is full of the most restless and wildest names today. Elon Musk was the primary driving force behind this escape. The catalyst for this event occurred a year ago. In that 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 value to a trillion dollars, the judge still tore up this outcome-based contract with a single ruling, citing "insufficient independence of the board." This verdict thoroughly enraged Silicon Valley's upstarts. In a fit of anger, the "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 fight to break free. This series of receding figures heralded the twilight of an old era. In the past, large companies stayed in Delaware for protection, because it represented a mature and rational legal system; now, in order to survive and grow rapidly, the top companies believe that they must leave Delaware to be safe. Blood must be shed for freedom. In the brutal world of business, 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 to be just 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 a few tens of thousands of dollars in administrative fees; the giants have to 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, have partners whose fees already exceed $2,000 per hour. The bill for drafting just a few hundred pages of a proxy statement that complies with SEC regulations can easily exceed $5 million. Secondly, there's the expensive battle for votes. 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, and it requires months of roadshows and lobbying, much like running for the US presidency. The most critical issue is the potential risk of default. The legal team needs to work day and night to review tens of thousands of commercial contracts because the "change of control" clauses in many bond agreements could be triggered instantly if the place of registration changes. 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 debt. For giants with massive outstanding debt, this means the instantaneous loss of tens or even hundreds of millions of dollars in cash flow—valuable funds that could have been used for research and development or buybacks, now becoming huge sunk costs. Given the dire consequences, why would they rather "cut off an arm" than leave? The answer lies hidden in the shadows beneath Delaware's glamorous legal system. For today's tech giants, Delaware is no longer a safe haven, but a hunting ground strewn with traps. Here, a vast, secretive, and greedy group thrives—The Plaintiffs' Bar. On Wall Street, this is jokingly referred to as a "merger tax." Statistics show that at its peak over the past decade, more than 90% of mergers and acquisitions valued at over $100 million faced litigation in Delaware. These lawyers are not concerned with corporate governance; like sharks smelling blood, they only need to hold one share of a company's stock to immediately file a class-action lawsuit for "insufficient disclosure" once the company releases a major announcement. This has long since evolved into a standardized "extortion assembly line": lawsuits, obstructing transactions, and forcing companies to settle. In order not to delay the transaction process, the vast majority of companies have no choice but to pay this "toll," which usually amounts to millions or even hundreds of millions of dollars. Dell, Activision Blizzard, Match Group… countless large companies have been “extorted” by flipping through Delaware’s case files. Here, businesses are no longer legally protected customers, but rather prey legally hunted. This kind of exploitation reached its absurd peak in the Tesla payroll case. After a Delaware judge ruled Musk's compensation package invalid, the plaintiffs' legal team filed a claim for 29.4 million Tesla shares as a winning fee. Based on the share 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 in the United States. At this moment, the true intentions were revealed. This is no longer a manifestation of legal justice; it is a blatant plunder of wealth creators. This heavy blow completely disillusioned Musk and sent chills down the spines of Coinbase, who was watching from the sidelines. Coinbase's management is well aware that although the knife hasn't fallen on them yet, staying in this old world full of "professional plaintiffs" and "sky-high legal fees" means it's only a matter of time before they get fleeced. The tech giants did the math: while their current legal, administrative, and public relations fees often amount to tens or even hundreds of millions, these are only short-term pains. If they continue to stay in Delaware, in this legal environment, losing control of their companies and being forced to accept endless lawsuits and extortion would be an incurable "cancer." Blood must be shed for freedom. The old world's ruler cannot measure the ambition of the new world. If the exorbitant "ransom" was merely a painful blow to Musk and his ilk, then the underlying conflict in Delaware's legal logic was the root cause that suffocated them. This is far more than just a debate over legal terms; it's the ultimate clash between two different business civilizations. For the past century, Delaware has been able to maintain its position as the iron throne of business because it has forged a tacit golden agreement with the American business community—the Business Judgment Rule. The subtext is that as long as the board of directors doesn't embezzle or break the law, the judge 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 by the erosion of time. With the unlimited expansion of the weight of institutional investors, Delaware's gavel has begun to slide more and more towards another extreme—the Entire Fairness Standard. This is a phrase 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 your processes don't meet my requirements, all your success is for naught." Musk's $56 billion compensation, which was written off, is a victim of this kind of microscopic scrutiny. In that lawsuit, despite Tesla achieving the most phenomenal growth in human business history and shareholders reaping enormous profits, a Delaware judge coldly ruled Musk's compensation invalid. The reason given was simply that board members had too good a relationship with Musk, and the process was not "perfectly independent." This arrogance of prioritizing procedures over results may be a safe haven for traditional companies like Coca-Cola, which are managed by professional managers; but for new species like Coinbase and Tesla, which rely on their founders to drive exponential growth, it is a fatal shackle. The old world's measuring stick can no longer measure the ambitions of the new world. Delaware judges can read the financial statements for steel, oil, and railroads, but they have a hard time understanding why Musk's personal IP is worth $50 billion. While Delaware was preoccupied with ethical censorship, Texas pragmatically offered an ambitious "partnership agreement." This is not just an empty "Welcome to Texas." In September 2024, the Texas Business Court officially opened for business. This is not only a new institution, but also a precise strike by Texas against Delaware's pain points. It only handles high-value cases. According to the bill, the court has exclusive jurisdiction over commercial disputes involving more than $5 million; and for publicly traded companies, only cases involving more than $10 million are eligible. This means that shareholder harassment lawsuits are effectively shut out. Even more disruptive is the appointment process for judges. Unlike the Delaware Supreme Court justices who serve 12-year terms and come from legal families, judges of the Texas Commercial Court are directly appointed by Governor Greg Abbott and serve only two-year terms. This signifies an unprecedented level of consensus 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 is sending a very clear message: "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. American Drift This may not mean the end of Delaware. For a long time to come, it will remain home to companies like Coca-Cola, Walmart, and General Electric. For these "old aristocrats" who seek stable dividends, value ESG scores, and are accustomed to professional management, Delaware's sophisticated and cumbersome rules remain the best safety net. But for another group of people, the air there is so thin that they can't breathe. We are witnessing the United States tearing itself apart into "two countries". One is represented by Delaware and New York. Here, distribution, checks and balances, and political correctness are emphasized. It is like an exquisite museum, well-ordered, yet exuding a stale and decadent atmosphere. A place represented by Texas and the New Frontier. Here, growth, efficiency, and even a savage vitality prevail, danger lurking everywhere. The departure of Coinbase and Musk is just the beginning. They are 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 risks. The newly established commercial court in Texas hadn't yet undergone the stress test of a major economic crisis, and the power grid remained vulnerable during blizzards. No one dared to guarantee that the next century of commercial legend would emerge from here. But that's precisely what makes business so fascinating, and also so cruel—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 will always run towards that field, even if it is barren, but where one can run wild.Text: Sleepy.txt On the map, the United States remains a unified federation; but in terms of business logic, we are witnessing the United States tearing apart into "two countries". In early winter of 2025, Coinbase, the largest cryptocurrency exchange in the United States, officially began the process of moving its registration from Delaware to Texas. In the long narrative of American business history, it is hard to ignore the sense of resolute tragedy behind this decision—it is not just a change of administrative address, but more like a spiritual "parricide" and "abdication". For the past century, Delaware has been the undisputed "Mecca" of American commercial civilization and the highest symbol of the industrial age. The term "Mecca" signifies more than just a geographical coordinate; it represents the culmination of a faith. On this narrow peninsula, less than two thousand square miles in size, lie over 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 garage in California, but its soul (legal entity) must be located in Delaware. It boasts the oldest and most professional Court of Chancery in the United States. For investors and professional managers of that era, Delaware represented an almost religious certainty—it had the most robust fiduciary responsibility, the most predictable case law, and a sense of security that was considered the cornerstone of business. But now, this rock, which has carried a century of commercial faith, has developed shocking cracks. Coinbase's departure is not an isolated case. If you look at the list of those who have migrated in this wave, you will find it is full of the most restless and wildest names today. Elon Musk was the primary driving force behind this escape. The catalyst for this event occurred a year ago. In that 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 value to a trillion dollars, the judge still tore up this outcome-based contract with a single ruling, citing "insufficient independence of the board." This verdict thoroughly enraged Silicon Valley's upstarts. In a fit of anger, the "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 fight to break free. This series of receding figures heralded the twilight of an old era. In the past, large companies stayed in Delaware for protection, because it represented a mature and rational legal system; now, in order to survive and grow rapidly, the top companies believe that they must leave Delaware to be safe. Blood must be shed for freedom. In the brutal world of business, 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 to be just 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 a few tens of thousands of dollars in administrative fees; the giants have to 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, have partners whose fees already exceed $2,000 per hour. The bill for drafting just a few hundred pages of a proxy statement that complies with SEC regulations can easily exceed $5 million. Secondly, there's the expensive battle for votes. 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, and it requires months of roadshows and lobbying, much like running for the US presidency. The most critical issue is the potential risk of default. The legal team needs to work day and night to review tens of thousands of commercial contracts because the "change of control" clauses in many bond agreements could be triggered instantly if the place of registration changes. 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 debt. For giants with massive outstanding debt, this means the instantaneous loss of tens or even hundreds of millions of dollars in cash flow—valuable funds that could have been used for research and development or buybacks, now becoming huge sunk costs. Given the dire consequences, why would they rather "cut off an arm" than leave? The answer lies hidden in the shadows beneath Delaware's glamorous legal system. For today's tech giants, Delaware is no longer a safe haven, but a hunting ground strewn with traps. Here, a vast, secretive, and greedy group thrives—The Plaintiffs' Bar. On Wall Street, this is jokingly referred to as a "merger tax." Statistics show that at its peak over the past decade, more than 90% of mergers and acquisitions valued at over $100 million faced litigation in Delaware. These lawyers are not concerned with corporate governance; like sharks smelling blood, they only need to hold one share of a company's stock to immediately file a class-action lawsuit for "insufficient disclosure" once the company releases a major announcement. This has long since evolved into a standardized "extortion assembly line": lawsuits, obstructing transactions, and forcing companies to settle. In order not to delay the transaction process, the vast majority of companies have no choice but to pay this "toll," which usually amounts to millions or even hundreds of millions of dollars. Dell, Activision Blizzard, Match Group… countless large companies have been “extorted” by flipping through Delaware’s case files. Here, businesses are no longer legally protected customers, but rather prey legally hunted. This kind of exploitation reached its absurd peak in the Tesla payroll case. After a Delaware judge ruled Musk's compensation package invalid, the plaintiffs' legal team filed a claim for 29.4 million Tesla shares as a winning fee. Based on the share 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 in the United States. At this moment, the true intentions were revealed. This is no longer a manifestation of legal justice; it is a blatant plunder of wealth creators. This heavy blow completely disillusioned Musk and sent chills down the spines of Coinbase, who was watching from the sidelines. Coinbase's management is well aware that although the knife hasn't fallen on them yet, staying in this old world full of "professional plaintiffs" and "sky-high legal fees" means it's only a matter of time before they get fleeced. The tech giants did the math: while their current legal, administrative, and public relations fees often amount to tens or even hundreds of millions, these are only short-term pains. If they continue to stay in Delaware, in this legal environment, losing control of their companies and being forced to accept endless lawsuits and extortion would be an incurable "cancer." Blood must be shed for freedom. The old world's ruler cannot measure the ambition of the new world. If the exorbitant "ransom" was merely a painful blow to Musk and his ilk, then the underlying conflict in Delaware's legal logic was the root cause that suffocated them. This is far more than just a debate over legal terms; it's the ultimate clash between two different business civilizations. For the past century, Delaware has been able to maintain its position as the iron throne of business because it has forged a tacit golden agreement with the American business community—the Business Judgment Rule. The subtext is that as long as the board of directors doesn't embezzle or break the law, the judge 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 by the erosion of time. With the unlimited expansion of the weight of institutional investors, Delaware's gavel has begun to slide more and more towards another extreme—the Entire Fairness Standard. This is a phrase 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 your processes don't meet my requirements, all your success is for naught." Musk's $56 billion compensation, which was written off, is a victim of this kind of microscopic scrutiny. In that lawsuit, despite Tesla achieving the most phenomenal growth in human business history and shareholders reaping enormous profits, a Delaware judge coldly ruled Musk's compensation invalid. The reason given was simply that board members had too good a relationship with Musk, and the process was not "perfectly independent." This arrogance of prioritizing procedures over results may be a safe haven for traditional companies like Coca-Cola, which are managed by professional managers; but for new species like Coinbase and Tesla, which rely on their founders to drive exponential growth, it is a fatal shackle. The old world's measuring stick can no longer measure the ambitions of the new world. Delaware judges can read the financial statements for steel, oil, and railroads, but they have a hard time understanding why Musk's personal IP is worth $50 billion. While Delaware was preoccupied with ethical censorship, Texas pragmatically offered an ambitious "partnership agreement." This is not just an empty "Welcome to Texas." In September 2024, the Texas Business Court officially opened for business. This is not only a new institution, but also a precise strike by Texas against Delaware's pain points. It only handles high-value cases. According to the bill, the court has exclusive jurisdiction over commercial disputes involving more than $5 million; and for publicly traded companies, only cases involving more than $10 million are eligible. This means that shareholder harassment lawsuits are effectively shut out. Even more disruptive is the appointment process for judges. Unlike the Delaware Supreme Court justices who serve 12-year terms and come from legal families, judges of the Texas Commercial Court are directly appointed by Governor Greg Abbott and serve only two-year terms. This signifies an unprecedented level of consensus 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 is sending a very clear message: "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. American Drift This may not mean the end of Delaware. For a long time to come, it will remain home to companies like Coca-Cola, Walmart, and General Electric. For these "old aristocrats" who seek stable dividends, value ESG scores, and are accustomed to professional management, Delaware's sophisticated and cumbersome rules remain the best safety net. But for another group of people, the air there is so thin that they can't breathe. We are witnessing the United States tearing itself apart into "two countries". One is represented by Delaware and New York. Here, distribution, checks and balances, and political correctness are emphasized. It is like an exquisite museum, well-ordered, yet exuding a stale and decadent atmosphere. A place represented by Texas and the New Frontier. Here, growth, efficiency, and even a savage vitality prevail, danger lurking everywhere. The departure of Coinbase and Musk is just the beginning. They are 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 risks. The newly established commercial court in Texas hadn't yet undergone the stress test of a major economic crisis, and the power grid remained vulnerable during blizzards. No one dared to guarantee that the next century of commercial legend would emerge from here. But that's precisely what makes business so fascinating, and also so cruel—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 will always run towards that field, even if it is barren, but where one can run wild.