Dexit

Dexit is a coined word, not a legal one. It appears in no statute, no regulation and no reported opinion as a term of art. Bankers, proxy advisers and the financial press use it to describe companies changing their state of incorporation away from Delaware, a pattern that began in earnest in 2024. Treat it the way you would treat any market label. Useful for orientation. Useless as authority.

The case that started it

In January 2024 the Delaware Court of Chancery rescinded Elon Musk's 2018 Tesla compensation package in Tornetta v. Musk, 310 A.3d 430 (Del. Ch. 2024), applying entire fairness review on the basis that Musk was a controlling stockholder as to that award. Tesla put reincorporation in Texas to its stockholders, who approved it, and the move became effective June 13, 2024. SpaceX, which is private, also moved to Texas that year.

The sequel complicates the received story. On December 19, 2025 the Delaware Supreme Court reversed the rescission in In re Tesla, Inc. Derivative Litigation, holding that rescission was an inappropriate remedy where Musk had worked for six years and every performance tranche had vested. The plaintiff was left with nominal damages, and the fee award was cut sharply from $345 million. Anyone still citing the Chancery decision as settled law on controller compensation is well behind.

Where companies actually went

Nevada has drawn more departures by company count than Texas. Dropbox, TripAdvisor and Roblox all reincorporated there. TripAdvisor's move was challenged and produced a decision that widened the path for everyone else. In Maffei v. Palkon, 339 A.3d 705 (Del. 2025), the Delaware Supreme Court applied the business judgment rule rather than entire fairness, reasoning that a reincorporation approved on a clear day, with no pending or imminent claims and no specific transaction in contemplation, does not hand the controller a material non-ratable benefit merely because future litigation exposure might be lower.

Texas has attracted fewer companies but larger ones. Tesla is the anchor. Dillard's announced a Delaware to Texas reincorporation in July 2025.

One frequently cited example needs correcting because it is routinely miscounted. ExxonMobil redomiciled to Texas in 2026 with shareholder approval, and it is a genuine redomestication, but Exxon was a New Jersey corporation. It was never a Delaware exit.

How big is it, really

Smaller than the coverage implies. Delaware remains the state of incorporation for the large majority of US public companies and for the overwhelming majority of the S&P 500. Reincorporation proposals rose sharply between the 2024 and 2025 proxy seasons, but the absolute numbers run in the dozens, not the hundreds, and a meaningful share of proposals are withdrawn before any vote. Delaware also answered legislatively. The 2025 amendments to Sections 144 and 220 of the DGCL removed some of the pressure that prompted departures in the first place, and the Delaware Supreme Court has since upheld them.

For a private Texas company the practical question is much narrower than the headline. You are not joining a movement. You are deciding whether your investors will fund a Texas entity, whether your governing documents depend on Delaware concepts that have no Texas analogue, what your lenders will require, and what a conversion costs to execute properly.