Home Means Nevada

While it remains to be seen, 2025 may go down in history as the year of Dexit.  A few weeks ago, I wrote that several companies that had filed proxy materials proposing to reincorporate from Delaware to Nevada.  Last Friday, Dropbox, Inc. filed a preliminary information statement with the Securities and Exchange Commission disclosing stockholder approval by written consent of a reincorporation of the company from Delaware to Nevada.  In explaining the move, Dropbox took aim at, among other things, the litigation environment in Delaware:

As described above, the Company is in a transformational period.  The evaluation committee and our board of directors determined that it is important for the Company to be able to operate with agility during this period of business transformation and that it would be competitively advantageous for the Company to have a predictable, statute-focused legal environment during a time of rapid business change.  The evaluation committee and our board of directors considered Nevada’s statute-focused approach to corporate law and other merits of Nevada law and determined that Nevada’s approach to corporate law is likely to foster more predictability than Delaware’s approach.  Among other things, the Nevada statutes codify the fiduciary duties of directors and officers, which decreases reliance on judicial interpretation and promotes stability and certainty for corporate decision-making.  The evaluation committee and our board of directors also considered the increasingly litigious environment in Delaware, which has engendered less meritorious and costly litigation and has the potential to cause unnecessary distraction to the Company’s directors and management team and potential delay in the Company’s response to the evolving business environment.  The evaluation committee and our board of directors believe that a more predictable legal environment will better permit the Company to respond to emerging business trends and conditions as needed.

In other news, Mike Isaac and Eli Tan at The New York Times wrote:

Meta [Platforms, Inc.], the owner of Facebook, Instagram and WhatsApp, is considering changing where it is incorporated from Delaware to another state, two people with knowledge of the matter said.

Perhaps not coincidentally, Andrew Houston is the Chief Executive Officer and Chairman of Dropbox and a member of the Board of Directors of Meta.