Meta, 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.
The company is looking at Texas and a handful of other states, said the people, who were not authorized to speak on the confidential discussions. The process is at an early stage and no decision has been made, they added, and Meta’s corporate headquarters would remain in Menlo Park, Calif.
A spokesman for Meta declined to comment. The Wall Street Journal earlier reported that the company might exit Delaware and reincorporate in Texas or elsewhere.
Since Meta was founded as Facebook in 2004, it has been incorporated in Delaware. Many shareholder lawsuits are filed in Delaware courts and Meta faces litigation there from a number of cases, including one stemming from a scandal over user privacy involving the voter profiling firm Cambridge Analytica in 2018.
Incorporating in another state that might be more favorable to companies rather than plaintiffs in class action lawsuits could help Meta in future shareholder litigation, the people said.
Last year, Elon Musk’s private rocket company, SpaceX, switched where it was incorporated to Texas from Delaware. Mr. Musk made the move weeks after a Delaware judge voided his pay package at Tesla, the electric vehicle maker that he leads.
That case was brought by Tesla shareholders who were challenging a stock options package that allowed Mr. Musk to acquire about 304 million Tesla shares at a preset price if the company achieved certain goals. The judge ruled that Mr. Musk had effectively overseen his own compensation plan, valued at more than $50 billion at the time, with the help of compliant board members.
This is a developing story. Check back for updates.
