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When CEOs move, they often move their headquarters closer to where they live. Somehow Tesla managed to survive all the problems of California until shortly afte

When CEOs move, they often move their headquarters closer to where they live. Somehow Tesla managed to survive all the problems of California until shortly after Musk moved to Texas. Folks talking about the advantages and disadvantages of California vs Texas may be overthinking this.

pmorici 5y ago
Wonder if it had anything to do with this… https://mobile.twitter.com/unusual_whales/status/1446251762499743750 https://mobile.twitter.com/unusual_whales/status/14462517624...
- andyxor 5y ago
  or this https://nypost.com/2021/10/05/tesla-ordered-to-pay-137m-to-ex-worker-over-racist-work-culture/ https://nypost.com/2021/10/05/tesla-ordered-to-pay-137m-to-e...
  - semiquaver 5y ago
    > federal court
    - andyxor 5y ago
      San Francisco jury
- tshaddox 5y ago
  A childish Twitter exchange from May 2020? I doubt it.
  - valparaiso 5y ago
    People vote for such leftists who are corrupt and sponsored by Oil companies, like in this particular example. Proposition 47, taxes on whites for reparations and so on - Commifornia gets what it should - people are leaving.
  - swiley 5y ago
    For anyone else I'd be skeptical.
  - rbolla 5y ago
    'Exactly' https://twitter.com/elonmusk/status/1446520043102162949?s=20 https://twitter.com/elonmusk/status/1446520043102162949?s=20
- jansan 5y ago
  On the list of most expensive tweets of all time, the one by Lorena Gonzales must be in the top ten.
darawk 5y ago
I mean, you could just as easily argue that the problems of California are what caused his move to Texas, as simply testing the waters for the move of the HQ.
- random314 5y ago
  Musk had billions of dollars in performance based stocks vesting over these years. The simplest reason for moving is avoiding billions of dollars in California state income taxes.
  - darawk 5y ago
    No it isn't. CA will still try to tax those shares if and when he decides to liquidate them. However, Musk does not ever need to liquidate any shares. If he never wants to pay any tax, all he has to do is buy a hedge against the shares (thereby locking in a particular price) and take out loans against the now hedged asset. And like magic, he's got all the cash he could ever need and zero capital gains.
    - jtsiskin 5y ago
      …but how does he pay back those loans?
      - plorkyeran 5y ago
        His estate pays them back when he dies. Inherited shares have their cost basis reset to the current value, so if his heirs sell them immediately there's no capital gains to be taxed.
        double_nan 5y ago
        The loan will be cheap but not free. The problem with shares is that their price can go down to zero in case of company bankruptcy. So there will be premium for that risk.
DSingularity 5y ago
Or maybe it takes years to make such a move but when it’s decided CEO’s get a head start.
narrator 5y ago
The talk about wealth taxes was probably one of the reasons he decided to move. You want to get all the billionaires to move out of your state, just bring up wealth taxes.
muzz 5y ago
Elon personally potentially saving billions in taxes might have a lot to do with both of those ie his move and then the company's move. As an investor in the company, I am concerned about that (that this change was done to benefit one person rather than the company). https://www.houstonchronicle.com/business/article/Elon-Musk-s-move-from-California-to-Texas-could-15789041.php https://www.houstonchronicle.com/business/article/Elon-Musk-...
- jillesvangurp 5y ago
  I'm a shareholder as well. I can see the value add of a friendlier tax regime for the company, its employees, and indeed its CEO, less bureaucracy, and access to clean energy that Texas has to offer over the Bay are. I see it in terms of share holder value. Overpaying for staff, infrastructure, housing, facilities, etc. and dealing with local government that is too inept to address even the most basic challenges (housing, water management, roads, electricity, etc.) is not share holder value. They have big expansion plans and most of that is outside of California. So, I'd say this is a good move for them. They no longer need the Bay Area investors. That was always the main reason for being there. It was critical to them just a few years ago when they were struggling to survive. But they turned a corner and are now very profitable so they can cut loose from that safely. Tesla is now a multinational and while California is still an important market for it, they have bigger markets that they are thinking about now where they are starting to operate huge factories as well. Fremont went from being the largest Tesla factory to being one of the older and smaller ones in a few years.
  - muzz 5y ago
    This is why we have markets. This news is now public, and TSLA is down today, ie investors have decided it is worth less after the news than before it.
    - jillesvangurp 5y ago
      Slightly up now. Tesla has been trending up throughout last quarter by about 150$, 50$ in the last month, and 10$ in the last week. It's now worth more than before the announcements. Not surprising considering another great quarter and the opening party for their Berlin factory last weekend. Of course most big investors would have factored in most of that news already long before any announcements would have been made.
sixothree 5y ago
Also he’s building a darn spaceport in the south most location in Texas. That’s might have something to do with it.

pmorici 5y ago

Wonder if it had anything to do with this… https://mobile.twitter.com/unusual_whales/status/1446251762499743750 https://mobile.twitter.com/unusual_whales/status/14462517624...

andyxor 5y ago
or this https://nypost.com/2021/10/05/tesla-ordered-to-pay-137m-to-ex-worker-over-racist-work-culture/ https://nypost.com/2021/10/05/tesla-ordered-to-pay-137m-to-e...
- semiquaver 5y ago
  > federal court
  - andyxor 5y ago
    San Francisco jury
tshaddox 5y ago
A childish Twitter exchange from May 2020? I doubt it.
- valparaiso 5y ago
  People vote for such leftists who are corrupt and sponsored by Oil companies, like in this particular example. Proposition 47, taxes on whites for reparations and so on - Commifornia gets what it should - people are leaving.
- swiley 5y ago
  For anyone else I'd be skeptical.
- rbolla 5y ago
  'Exactly' https://twitter.com/elonmusk/status/1446520043102162949?s=20 https://twitter.com/elonmusk/status/1446520043102162949?s=20
jansan 5y ago
On the list of most expensive tweets of all time, the one by Lorena Gonzales must be in the top ten.

darawk 5y ago

I mean, you could just as easily argue that the problems of California are what caused his move to Texas, as simply testing the waters for the move of the HQ.

random314 5y ago
Musk had billions of dollars in performance based stocks vesting over these years. The simplest reason for moving is avoiding billions of dollars in California state income taxes.
- darawk 5y ago
  No it isn't. CA will still try to tax those shares if and when he decides to liquidate them. However, Musk does not ever need to liquidate any shares. If he never wants to pay any tax, all he has to do is buy a hedge against the shares (thereby locking in a particular price) and take out loans against the now hedged asset. And like magic, he's got all the cash he could ever need and zero capital gains.
  - jtsiskin 5y ago
    …but how does he pay back those loans?
    - plorkyeran 5y ago
      His estate pays them back when he dies. Inherited shares have their cost basis reset to the current value, so if his heirs sell them immediately there's no capital gains to be taxed.
      - double_nan 5y ago
        The loan will be cheap but not free. The problem with shares is that their price can go down to zero in case of company bankruptcy. So there will be premium for that risk.

DSingularity 5y ago

Or maybe it takes years to make such a move but when it’s decided CEO’s get a head start.

narrator 5y ago

The talk about wealth taxes was probably one of the reasons he decided to move. You want to get all the billionaires to move out of your state, just bring up wealth taxes.

muzz 5y ago

Elon personally potentially saving billions in taxes might have a lot to do with both of those ie his move and then the company's move. As an investor in the company, I am concerned about that (that this change was done to benefit one person rather than the company). https://www.houstonchronicle.com/business/article/Elon-Musk-s-move-from-California-to-Texas-could-15789041.php https://www.houstonchronicle.com/business/article/Elon-Musk-...

jillesvangurp 5y ago
I'm a shareholder as well. I can see the value add of a friendlier tax regime for the company, its employees, and indeed its CEO, less bureaucracy, and access to clean energy that Texas has to offer over the Bay are. I see it in terms of share holder value. Overpaying for staff, infrastructure, housing, facilities, etc. and dealing with local government that is too inept to address even the most basic challenges (housing, water management, roads, electricity, etc.) is not share holder value. They have big expansion plans and most of that is outside of California. So, I'd say this is a good move for them. They no longer need the Bay Area investors. That was always the main reason for being there. It was critical to them just a few years ago when they were struggling to survive. But they turned a corner and are now very profitable so they can cut loose from that safely. Tesla is now a multinational and while California is still an important market for it, they have bigger markets that they are thinking about now where they are starting to operate huge factories as well. Fremont went from being the largest Tesla factory to being one of the older and smaller ones in a few years.
- muzz 5y ago
  This is why we have markets. This news is now public, and TSLA is down today, ie investors have decided it is worth less after the news than before it.
  - jillesvangurp 5y ago
    Slightly up now. Tesla has been trending up throughout last quarter by about 150$, 50$ in the last month, and 10$ in the last week. It's now worth more than before the announcements. Not surprising considering another great quarter and the opening party for their Berlin factory last weekend. Of course most big investors would have factored in most of that news already long before any announcements would have been made.

sixothree 5y ago

Also he’s building a darn spaceport in the south most location in Texas. That’s might have something to do with it.