Upon losing his $55B+ Tesla compensation package, CEO Elon Musk warned X users against incorporating their companies in Delaware, instead recommending Nevada or Texas “if you prefer shareholders to decide matters.”

Tesla is based in Austin, Texas — so why is it, alongside so many companies, incorporated in Delaware?

The backstory

In 2018, an already-wealthy Musk agreed to work 10 years without pay, in exchange for stock options worth $55.8B if Tesla achieved a $650B valuation. The pay was meted out along 12 milestones, which Musk satisfied in 2023.

While Tesla argued that the payout was needed to ensure Musk’s ultimately beneficial focus remained on the company, shareholders sued over the plan, alleging:

• It was too big.
• Musk was too cozy with the board members who agreed to the plan, his brother among them.
• They didn’t receive enough info before approving it.

A Delaware judge agreed and recalled Musk’s compensation package. Now, Tesla must devise a new pay structure or appeal.

Why Delaware?

Over 1.8m businesses — and ~66% of Fortune 500 companies — are incorporated in the state, including Amazon and Alphabet.

Delaware’s Court of Chancery is the oldest business court in the US. It uses judges over juries for speedier trials, and it’s clear and current on corporate laws.

It’s convenient, respected, and has experience ruling in business-related cases. It’s usually pretty predictable, which is appealing to investors and the startups that want their money.

So why is Musk mad at Delaware?

He didn’t get his way. 🤷

The Musk decision wasn’t necessarily expected — analyst Dan Ives said he was shocked that Tesla lost in Delaware, calling it a “huge legal decision,” per NPR — but neither was Musk’s compensation, which would have been, by far, the biggest ever paid to an executive.

We’ll see how this shakes out in a likely appeal. In the interim, even without Tesla, Delaware probably won’t be hurting for new businesses.

The world’s 10th-richest man poured a chunk of his $80.7B fortune into a historical punching bag of an NBA franchise, upped its value by $2.65B, and is now building the most expensive arena known to man: a $2B+ palace designed to look like a giant basketball net.

It’s one hell of a business story — but the most intriguing part of it all? The toilets.

Or, as Los Angeles Clippers owner and ex-Microsoft CEO Steve Ballmer exuberantly put it: “Toilets, toilets, toilets.”

• Thanks to Ballmer’s porcelain-purchasing obsession, the Intuit Dome will have ~1.2k toilets and urinals when it opens later this year.
• That’s roughly one fixture per 15 seats, more than 2x the typical NBA arena ratio.

And this matters because…?

Most major sports leagues set attendance records in 2023, but the party won’t last forever, per Front Office Sports. The outlook for 2024 is more downbeat:

• “Funflation,” the rising cost to attend live entertainment events, is real — prices for sports tickets soared 25.1% from 2022 to 2023.
• The average cost for a family of four to attend an NBA game — buying four cheap seats, a parking spot, two beers, two sodas, and four hot dogs — is a runaway train at $304.64.

This is likely unsustainable for team box offices. Many teams are already facing ongoing declines in season ticket sales, and competition for fans’ dollars, and attention, is only getting stiffer.

What’ll keep attendance strong?

Offering an elite game day experience no couch can compete with. (See: sports franchises collectively spending billions on facility upgrades.)

That includes — you guessed it — toilets. As many as possible. The stadium restroom is central to fan satisfaction:

• The average ticket price for the Clippers’ chief competition, the LA Lakers, is $518.
• Let’s assume, with 48 minutes of play, 15 minutes for halftime, and an hour’s worth of breaks (i.e., timeouts, fouls, bats getting loose), a fan spends ~123 minutes in the arena.
• Waiting in bathroom lines for 25 of those minutes eats up 20% of the event.
• Spending $518, with $103 worth of toilet-waiting time, is not a great value.

Intuit Dome won’t have that problem. Ballmer knows better: Keeping fans in their seats, and buying $13+ beers without a second thought about those bathroom lines, is good business.

• Elmo checks in with the internet to find it is full of sad people. The internet responded to the little red monster’s X post, which has amassed 198m+ views, with a unanimous “not great.” Responses got so heavy — e.g., “Elmo I’m depressed and broke” — that the official Sesame Street account followed up by sharing mental health resources. Hopefully Elmo has good health insurance, because we clearly don’t.
• Malaysia’s new king is an “outspoken motorcycle-riding” billionaire with ties to Hitler. Sultan Ibrahim Iskandar began his five-year reign this week as the 17th king of Malaysia, the only country with a rotating monarchy. Among other luxuries, the 65-year-old investor-turned-monarch owns a private army, several international properties, and a collection of 300+ vintage cars — one of which previously belonged to Adolf Hitler, a purported friend of Iskandar’s great grandfather.
• Speaking of billionaire world leaders, Putin claims he isn’t one. Vladimir Putin’s net worth is widely cited to hover around $200B, which, if true, would make him the world’s second-richest person. But according to the Russian president’s official financial disclosure — released on Tuesday and ahead of Russia’s presidential elections in March — he earns a relatively modest salary of $175k and his assets are limited to a few properties, a couple of old cars, and a parking space. (Sure.)
• A pigeon that was detained for eight months on suspicion of espionage has finally been released. Turns out the avian was just an open-water racing bird from Taiwan that had flown the coop to Mumbai — not a Chinese spy bird, as Indian authorities had suspected. Unfortunately, no details on their methods of interrogation, but the pigeon has been set free.