All Around the Chancery Court Elmo Chased to Weasel [UPDATE-1]

[NB: check the byline, thanks! Update(s) will appear at bottom of post. /~Rayne]

This isn’t going to be a very long post because others have already covered the news that Twitter, Inc. is no more having been subsumed by its successor, X Corporation.

See Slate’s coverage which has one of the earliest and more thorough reports, or TechCrunch’s report.

Elmo has been stuck on name X for decades; he named his online bank business launched in 1999 That business merged in 2000 with rival Confinity, an online bank founded by Peter Thiel and others. The merged entity became PayPal.

Before Elmo closed on the purchase of Twitter, he’d said that Twitter was a path toward a new online business based on an application.

The intention was to create an “everything app” as popular as TikTok and as encompassing as WeChat — both of which are Chinese apps.

The X naming convention is in head-to-head competition with Google’s X company founded in 2010 — “X, the moonshot company” as Google styles and tags the entity. Funny, that; both Musk and Google wanting off-world exploration.

It’s possible the move to dissolve Twitter, Inc. and reconstitute it under X corp is merely consolidation of Musk-helmed businesses in Nevada where parent organization X Holdings is already incorporated. Twitter was already a subset of a Special Purpose Acquisition Company (SPAC) under the April 25, 2022 terms of sale.

The dissolution of Twitter as a Delaware corporation is merely the next step of the acquisition process.

However it’s an open question why Musk moved the entire corporation to Nevada instead of leaving Twitter in Delaware as Tesla, Inc. remains.

Could it be that Elmo is so afraid of Delaware’s Chancery Court and discovery should a lawsuit be filed against Twitter that he chose to weasel the corporation into Nevada to avoid it?

Here’s a list of advantages to incorporating a business in Nevada as compared to other states:

• Nevada law protects both directors and officers from individual liability for any acts committed by or on behalf of the business (with the exception of fraud).
• Jurisdiction for legal suits is in the state where the business incorporated.
• Nevada has significant privacy rights and doesn’t share any company information with the IRS. Therefore, no one will know the owner’s name of the corporation.
• You don’t have to identify the shareholders of the corporation.
• Unlimited stock is allowed.
• Nominee shareholders are allowed.

Could it be that Elmo is so concerned about his own personal liability that he moved the corporation to Nevada to avail himself of protections for owners/principals?

Or is one of these other advantages paramount — like the privacy rights which may be extended to investors like Prince Al Waleed bin Talal Al Saud or Marc Andreesen‘s a16z?

How will we know if/when the microblogging platform formerly known as Twitter becomes the agent of a foreign government should ownership shift even more substantially to foreign entities through a combination of equity and debt?

Whatever Musk has up his sleeve he certainly didn’t tip in his interview this week with the BBC,  which the Beeb summarized in six points:

1. He denies hate speech on Twitter has spiked
2. He voted for Joe Biden
3. He says Twitter is beating the bots in war on disinfo
4. He’s against banning TikTok
5. He would turn down $44bn for Twitter
6. He will back down on how BBC is labelled

I don’t know about you but I don’t believe most of this; it reads like the Liar’s Paradox.

Whatever this corporate shell game is about, I know Elmo is still burning Twitter down a bit more each day, including his labeling NPR as a “state-affiliated media” outlet after the GOP has ensured for decades public broadcasting must be starved of funding. Receiving but 1% of its annual revenues from the federal government, NPR has now left Twitter.

The departure of NPR and its 52 feeds makes this revenue forecast appear more reliable:

Oops, I mean this forecast:

Though it still looks like gambling, yes?

~ ~ ~

UPDATE-1 — 2:30 P.M. ET 13-APR-2023 —

And there it is, the birth of X Corp’s “everything app.”

CNBC: Twitter partners with eToro to let users trade stocks, crypto as Musk pushes app into finance

Who in their right mind would trust their financial information to Elon Musk’s latest Rube Goldberg machine?

Knowing the exposure this business has to foreign investors located in countries which have questionable affinities with the U.S., why would anyone do this if they weren’t a crackpot Elmo fanboi?

37 replies
  1. PieIsDamnGood says:

    Elmo would have been better off shoveling his money into Vegas slot machines, they typically pay out ~90%

      • fubar jack says:

        I think it is more about control and dominance of the information ecosystem. Him cracking beers , in a luxury box at the superbowl with Rupert might be a tell.

        • Rayne says:

          If he was doing that regularly I might agree, but the kind of folks he relied on for funding are representative of the crowd at the World Cup in Qatar.

          EDIT: Here are two persons Musk was seen with at the World Cup who are directly linked to investments —
          — Mansoor Bin Ebrahim Al-Mahmoud, CEO of Qatar Investment Authority – invested in Musk’s Twitter and in Brookfield Asset Management
          — Jared Kushner – linked to Brookfield Asset Management which invested in Musk’s Twitter

  2. P J Evans says:

    I’ve notice there are more porn “bots” on Twitter this year than last. Usually way down in the comments, with an image tagged as for adults. I block.

  3. bmaz says:

    Yes, Musk certainly, and petulantly, hates Delaware’s Chancery Court at this point. But Nevada’s corporate protections are every bit as strong as Delaware’s, if not more so. Have been for a long time.

    But the added bonus is that in Delaware, you can actually get to court in due time, Nevada not nearly as much.

  4. Peterr says:

    Could it be that Elmo is so concerned about his own personal liability that he moved the corporation to Nevada to avail himself of protections for owners/principals?

    Or is one of these other advantages paramount — like the privacy rights which may be extended to investors like Prince Al Waleed bin Talal Al Saud or Marc Andreesen‘s a16z?

    Or, of course, both.

    • bmaz says:

      Moving from DE to NV is actually smart, especially for a corporate entity, at least for now, centered in Northern California. It makes a lot of sense in a way.

      • Peterr says:

        Not disagreeing, but curious . . .

        What, specifically, makes you say that this “actually smart”? I can see lots of petty and personal reasons for Musk to do this, such as the two I quoted above from Rayne’s post, but the corporate advantages are not something I am familiar with.

        • bmaz says:

          Corporate law and location of the forum. Nevada is not just as good or better than Delaware, but a hell of a lot closer and cheaper for Musk to deal with. I would do this in a heartbeat were I him.

        • Peterr says:

          But the location of incorporation is independent of the corporate HQ in many/most cases, right? All the banks incorporated in Delaware may have a local office there, but they’ve got their official headquarters all over the place. Not sure how much financial savings plays into where you incorporate.

        • earlofhuntingdon says:

          Yes, corporate HQs are rarely in the same state as the state of incorporation.

          Tax liability is separate. It’s a function of playing the transfer pricing game. If played aggressively, as is common, income lands in the jurisdiction with the lowest tax costs, not where revenue is generated.

        • earlofhuntingdon says:

          Delaware’s chancery court has a long history of effectively litigating claims. Nevada, not so much. Visibility is much greater in Delaware, too, than Nevada, which has worked hard to outdo Delaware, Wyoming, etc., as the go to jurisdiction for secrecy and tax avoidance.

          The games lawyers play here are legion. One is to use tiers of tax and secrecy jurisdictions to own downstream ones, e.g., Delaware owns BVI, which owns Nevada corp.

  5. subtropolis says:

    This “Elmo” shit is fifth-grader material. Do you really need this to reinforce your moral superiority to that shithead?

    • RipNoLonger says:

      It’s quite all right when nicknames are assigned by the brass.

      My biggest complaint about using all these pseudonyms, whether by us lowly people or by the upper crust, is that doing a search in the browser won’t pull in everyone’s favorite moniker. I suppose we should just ask one of those chatGPT engines to help.

      [Moderator’s note: Please advise by reply whether you have changed your email address; please use the previous one in your reply to confirm identity. /~Rayne]

    • Rayne says:

      Welcome back to emptywheel where both of the potty-mouthed women who write about Twitter’s CEO (about which you exercise your own moral superiority by calling him a “shithead”) call him “Elmo.”

      Don’t like it? Hit the exit. Policing contributors’ language isn’t tolerated, and after 658 comments here you goddamned well should already know that. Fuck off.

  6. John Colvin says:

    The privacy advantages of being located in Nevada have diminished somewhat with the enactment of the Corporate Transparency Act in late 2020. Starting in 2024 (when regulations become effective), many entities (including those with less than 20+ full time employees and/or less than $5 million in gross receipts) will have to report beneficial ownership information to FinCEN, where the IRS will have access to it.

  7. Ewan Woodsend says:

    Did you mean “the owner’s name of the corporation” or “the owner of the corporation’s name”, that is, “the name of the owner of the corporation”? You wrote the first, I don’t understand what it means. Could be a typo.

  8. David F. Snyder says:

    Certainly all these bells and whistles put into place to help protect and legitimize mafia enterprises are the principal reason why wannabe supervillain Musk moved it there.

    Transparency doesn’t seem to be of much interest to this “libertarian” billionaires’ club.

  9. Rapier says:

    I’m surprised he didn’t choose Texas. I think he could be the president of Texas eventually.

  10. taluslope says:

    Musk’s biggest lie? I vote for #5.

    I must say as a Tesla stock holder, though, that the Twitter purchase was a blessing in disguise for Tesla. At the recent investor something_something_something, Musk was strangely quiet, and many Tesla employees were allowed to contribute. If you watched carefully, Musk bit his tongue frequently, as I’m sure he wanted to remove himself from being so much the face of Tesla because he was tanking the stock.

    Musk’s biggest lie take II:

    1. Full Self Driving is only 3 months away (since, what 2017 or so). AI experts claim it ain’t happening in my lifetime.
    2. SpaceX will send humans to Mars within 2 years (since, what 2020, I tried to find an answer on the internets but only found on wikipedia “The company has given many estimates of dates of the first human landing on Mars”, what do you wanna bet that the specific predicted dates have been scrubbed).

    • Phaedruses says:

      Don’t know about Mars, however the moon landing using a starship variant NASA approved, is scheduled for Dec 2025, which I see slipping. The first ever starship, to enter above the 100 KM mark; used for the beginning of outer-space, is scheduled to launch in a week or so. It will not complete even one full orbit, and most expect it to break up on re-entry. That is far from having a proven reliable launch platform to base a moon landing re-usable vehicle, given after they get a working starship, they have to redesign it into both the moon lander, and a tanker version to carry propellant to the moon lander for re-fueling. 4 trips BTW, not to mention working out refueling a large space vehicle in space, which has never been done before like they propose to do.

      Add to this working out docking a large space vehicle to a orbiting space station at the moon, which BTW is still on the drawing board and prototype manufacturing.

      I don’t see two years being enough time for a full moon lander, and tanker versions, to be designed and proven in 2 1/2 years, given his track record so far. My guess at this point 2028-29 realistically, since so much has to happen both at spaceX and NASA.

      Mars, my guess, 50-50 odds in his lifetime ….

      • Eyesoars says:

        You’re right to be skeptical re: Artemis and landing on the Moon, but it’s highly unlikely SpaceX will be the pacing item. Too many other things have to be on-time for that to happen, and they’re being done by organizations much, much less likely to be on time, particularly Boeing.

  11. interrobang says:

    One wonders if a potential $30B liability in Germany for systemically allowing hate speech on Twitter has anything to do with that PS Form 3575?

    [Moderator’s note: Can we assume this is your new username going forward instead of “!?FTWlol”? /~Rayne]

    • interrobang says:

      ¥€$ !?

      [Cute, but please don’t assume all the crew here will understand such cryptic messages. You’re being asked to confirm identity because spoofing is a thing. /~Rayne]

  12. Another dude from G-ville says:

    “and Google wanting off-world exploration” Google floated the idea of having a data center on the moon like 15 years ago or so. Make sense for a lot of reasons…

  13. Alan Charbonneau says:

    YouTube personality Thunderf00t (Phil Mason) has many takedowns of Musk. He’s a misogynist, but also a brilliant scientist. He takes on The Boring Company, Hyperloop, and many other Musk vaporware adventures.

    Here are a few of his titles:
    Elon Musk Invents Underground Traffic Jam!
    Elon Musk Literally Reinvents The Tunnel!
    How Elon Musk’S 700 Mph Hyperloop Concept Could Become The Fastest Way To Travel: Busted!
    Its Here!!!! Its Amazing!!! Its…. A Tunnel!
    Monoraill….. Monorail… Monoraiilll!!!! Blow Your Mind How Many Times Elon Musk Has Promised Revolution, And Delivered Nothing!
    Why Starship Will Fail At Mars!
    Why You Should Never Believe Elon Musk!

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