New York Governor Kathy Hochul (D) recently delivered a message to businesses operating in the Big Apple: There is “nothing to worry about” because “they’re very different than Donald Trump and his behavior.” Her declaration came soon after the Republican front-runner was slapped with a $355 million fine and a ban on conducting business in New York for three years. But the businessmen and women of America’s financial capital are worried they could be the next target of the government’s wrath and hellfire.
Investors (Don’t) Heart New York
Celebrity investor Kevin O’Leary scolded “loser” New York and promised to no longer invest in the Empire State. Appearing in interviews with CNN and the Fox Business Network, O’Leary stated that he was “shocked” by the move and conceded that “I can’t even understand or fathom the decision at all. There’s no rationale for it.” He added: “It was already on the top of the list of being a loser state. I would never invest in New York now. And I’m not the only person saying that.”
Grant Cardone, a real estate investor and best-selling author,
confirmed on X that his Cardone Capital team will “discontinue”
investing in New York City real estate, citing the risk outweighing the
opportunities. The political fallout will “deteriorate price and benefit
states that don’t have challenges.” As a result, Cardone, like so many
others before him, will be concentrating his efforts on Florida and
Texas.
It isn’t just individual investors who fear they will be in the line of fire. Remington Arms, one of the oldest gun manufacturers in the country, announced it is departing from New York because of its “toxic business environment.” Experts say more organizations will likely announce similar exits in the coming months.
Of course, the giant sucking sound emanating from the streets of New York is nothing new. This past summer, Bloomberg reported that dozens of firms have been leaving the state along with $1 trillion in capital that is heading south to the Sunshine State and the Lone Star State. As the Shark Tank personality noted, New York is already an abysmal place for investors and companies, from high taxes to uncompetitive regulation. The Trump verdict might have been the straw that broke the camel’s back, especially considering that no party was defrauded in the case.
Don’t Forget Delaware
While all the focus is on New York, there is another place in the country that has seen the courts become infected with the woke mind virus and embrace progressive politics. Delaware, known as America’s corporate law capital, is going scorched earth on various individuals and entities. Most notably, a bull’s-eye was placed on billionaire CEO Elon Musk’s back. As Liberty Nation reported, a Delaware judge voided Musk’s 2018 $56 billion pay package at Tesla Motors. Despite shareholders agreeing to the arrangement and Musk hitting all targets ahead of time, the courts determined that the company’s board of directors failed to prove “that the compensation plan was fair.” This prompted him to poll his X followers and ask if he should modify Tesla’s incorporation to Texas. His audience concurred, and now Musk is working to achieve this aim.
Barry Diller (Photo by Michael Loccisano/Getty Images for Semafor)
Others are attempting to change things in the First State. Billionaire Barry Diller is fighting Delaware by trying to reform how the courts scrutinize business transactions. Tripadvisor is seeking to reincorporate in Nevada amid the objection of minority shareholders. Match Group, the owner of Match and Tinder, is asking Delaware to diminish its inspection of transactions.
Delaware has largely enjoyed a monopoly in the world of corporate law and, as a result, possesses the power to examine dealings between publicly traded companies and shareholders harshly. Businesses often register in Delaware, which is home to an estimated two-thirds of Fortune 500 companies and 80% of initial public offerings (IPOs). Experts note that attorneys like the ease of functioning in one state due to the decades of precedence and specialized judges.
However, like New York, businesses are searching for alternatives – and several states are obliging. Texas is poised to launch a specialized business court in September, while Nevada has been working to slash litigation costs and provide better protections for executives. According to Securities and Exchange Commission (SEC) regulatory filings, Tripadvisor projects that relocating to Nevada would save the company approximately $250,000 per year in legal costs and taxes.
Deep in the Heart of Texas
Is Texas on track to become the nation’s new financial epicenter? It might not occur overnight, but the state is gradually chipping away at New York’s stranglehold on capital. While the Big Apple remains the chief urban center for finance, Dallas is ranked second – and the trend could persist.
A plethora of financial titans, from Bank of America to Wells Fargo, are investing significantly in the southern United States. Jamie Dimon, the head of the country’s largest bank, confirmed in March 2023 that JPMorgan Chase is expanding in Florida and Texas by opening new branches. “We now have more employees in Texas than in New York state,” Dimon told Bloomberg News. “It shouldn’t have been that way, but Texas loves you being there.”
Outside of banking, the list of big names planting new roots near the southern border is growing: Hewlett Packard, Oracle, Caterpillar, NRG Energy, Dropbox, and many more.
Escape From New York?
Indeed, Texas is quickly transforming into a state that offers more than energy. It is shifting into an oasis of all things, be it Big Tech or Big Finance. Does this mean New York will metastasize into a wasteland of progressivism? The big money is signaling that it does not want to wake up in a city that never sleeps because politicians, lawyers, and regulators are on a perpetual neo-McCarthyist hunt. Communism is no longer the question, but rather: “Are you now or have you ever been a part of the MAGA movement?”
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