New York (AFP)
The exodus of stars from Silicon Valley continues: Elon Musk, the whimsical boss of Tesla, confirmed on Tuesday that he left California to settle in Texas, a state with flexible taxation and lower cost of living.
“Yes, I moved to Texas,” he told a conference hosted by The Wall Street Journal.
Mr. Musk justifies his exile by the need to be as close as possible to the two projects which currently occupy most of his time: the development of rockets by his space company SpaceX in the south of the State and the construction of a automobile plant by Tesla near Austin.
SpaceX, like Tesla, retains significant business, and its headquarters in California, Musk said during the conference.
But this state, which hosts companies from Silicon Valley and the film industry in Los Angeles, "rests on its achievements," lamented Mr. Musk who has spent a large part of his life there.
The entrepreneur of South African origin had in particular scrambled with the local authorities in the spring, when the latter forced him to keep his car factory closed for several weeks to avoid the spread of Covid-19.
His move could in any case allow him, in theory, to make significant savings to the extent that Texas does not collect income tax.
Following the coronavirus pandemic which was accompanied by measures to restrict activity in order to limit its spread, several companies and personalities from Silicon Valley have chosen to leave California this year.
This is the case of Hewlett Packard Enterprise, one of the companies that contributed early to the influence of this region, which announced in early December the move of its headquarters from San Jose to Houston, Texas.
Data processing company Palantir, which made a notable IPO in September, has also distanced itself from the region, moving its headquarters from Palo Alto to Denver, Colorado.
- 2nd richest man in the world -
The announcement of Mr. Musk's departure from California comes the day Tesla announced plans to sell up to $ 5 billion of its securities, which has been on the rise since the start of the year.
The action of the maker of high-end electric vehicles reached a new record on Tuesday night, at 649.88 dollars, valuing the company at 616 billion dollars on Wall Street.
This is almost 10 times the market capitalization of General Motors (GM), the number one car seller in the United States, which is worth $ 63 billion.
This surge allowed Elon Musk to leap into the place of the second richest man in the world, with a fortune now estimated at 155 billion dollars, on paper, by the Bloomberg agency.
Tesla has been boosted for several months on the stock market by investor interest in electric vehicles, considered the future of the automobile.
The group has also benefited since mid-November from the announcement of its imminent entry into the S&P 500 index, which includes the 500 largest companies in New York.
This inclusion, which will take place on December 21, will allow Tesla's share to be systematically included in many financial products that mechanically follow its fluctuations, ETFs, which should give it even more scope.
Regarding the sale of up to $ 5 billion in shares announced Tuesday, the group says it only wants to use the money recovered to consolidate its balance sheet and for other general expenses.
He had started a similar operation in September.
The company has raised enough money this year "so that its balance sheet and capital structure allow it to strengthen its cash flow and thus gradually reduce its debt", notes Dan Ives, analyst for Wedbush.
This "leaves for the moment those who bet on a drop in the title", he adds in a note.
© 2020 AFP