Tesla moves headquarters from California to Texas

Published

3 years ago

October 7, 2021

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A man drives his Tesla car as the Starship SN8 of SpaceX is seen behind, days before a test launch of the company’s new super heavy-lift Starship rocket from their facilities in this small town of Boca Chita, Texas, December 4, 2020.

Gene Blevins | Reuters

Tesla is moving its headquarters from Palo Alto, California, to Austin, Texas, CEO Elon Musk announced at the company’s shareholder meeting on Thursday.

The meeting took place at Tesla’s vehicle assembly plant under construction outside of Austin on a property that borders the Colorado River, near the city’s airport.

However, the company plans to increase production in its California plant regardless of the headquarters move.

“To be clear we will be continuing to expand our activities in California,” Musk said. “Our intention is to increase output from Fremont and Giga Nevada by 50%. If you go to our Fremont factory it’s jammed.”

But, he added, “It’s tough for people to afford houses, and people have to come in from far away….There’s a limit to how big you can scale in the Bay Area.”

Regarding the plant underway in Austin, he noted that it would take some time to reach full production even after it’s completed.

“In Tesla-land it takes longer to build the factory than to get to high volume production once the factory is built,” Musk said. For example, Tesla’s Shanghai plant was built in 11 months, but took a year to reach high volume production. He expects Tesla’s new plant near Austin will follow Shanghai’s example.

Musk’s growing dissatisfaction with California has been apparent for some time. In April 2020, on a Tesla earnings call, Musk lashed out at California government officials calling their temporary Covid-related health orders “fascist” in an expletive-laced rant.

Later, Musk personally relocated to the Austin area from Los Angeles, where he had lived for two decades.

Doing so enabled Musk, who is also CEO of aerospace company SpaceX, to reduce his personal tax burden and be closer to a SpaceX launch site in Boca Chica, Texas.

Tesla’s board granted Musk an executive compensation package that can earn him massive stock awards based on the automaker’s market cap increases and some other financial targets. If he sells options set to expire in 2021, he could generate proceeds of more than $20 billion this year, according to InsiderScore.

California levies some of the highest personal income taxes in the country on its wealthy residents, but Texas has no personal income tax.

Tesla is not the first company to its headquarters out of California to Texas. Oracle and Hewlett Packard are among the tech giants who decided to make that move last year, for example.

Texas has been actively recruiting companies via its Texas Economic Development Act offering tax breaks to put new facilities in the state. Austin, with a top tech university and cultural events like South by Southwest, is a draw for tech employers.

Making such a move is not particularly burdensome, explained business attorney Domenic Romano, managing partner of Romano Law in New York City. A Delaware business that has operated as a “foreign” corporation with headquarters in California, like Tesla has, could relocate its domicile by establishing a facility in a new state, hiring there. and relocating key employees.

They would not have to shut down operations in other states, although they typically do pare them back.

“From a legal perspective, there’s less of a regulatory burden in Texas,” Romano said. “It’s a more business- and employer -riendly state in many ways. You have to jump through far fewer hoops in Texas or Florida as an employer than you do in California in terms of reporting requirements and more.”

Texas Gov. Greg Abbott said the Tesla CEO supported his state’s “social policies” as well. However, Elon Musk declined to weigh in on Texas’ restrictive new abortion law after Abbott made that claim.

“In general, I believe government should rarely impose its will upon the people, and, when doing so, should aspire to maximize their cumulative happiness,” Musk wrote on Twitter at that time. “That said, I would prefer to stay out of politics,” said Musk.

Tesla has generally garnered a huge amount of support from the state of California since it was founded there in 2003. It has enjoyed grant funding, tax breaks, incentives and favorable policies from the likes of the California Air Resources Board, California Energy Commission and California Alternative Energy and Advanced Transportation Financing Authority, among others.

Technology

Intuit shares drop as quarterly forecast misses estimates due to delayed revenue

Published

8 hours ago

November 21, 2024

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Intuit shares drop as quarterly forecast misses estimates due to delayed revenue

Intuit CEO Sasan Goodarzi speaks at the opening night of the Intuit Dome in Los Angeles on Aug. 15, 2024.

Rodin Eckenroth | Filmmagic | Getty Images

Intuit shares fell 6% in extended trading Thursday after the finance software maker issued a revenue forecast for the current quarter that trailed analysts’ estimates due to some sales being delayed.

Here’s how the company performed in comparison with LSEG consensus:

Earnings per share: $2.50 adjusted vs. $2.35 expected
Revenue: $3.28 billion vs. $3.14 billion

Revenue increased 10% year over year in the quarter, which ended Oct. 31, according to a statement. Net income fell to $197 million, or 70 cents per share, from $241 million, or 85 cents per share, a year ago.

While results for the fiscal first quarter topped estimates, second-quarter guidance was light. Intuit said it anticipates a single-digit decline in revenue from the consumer segment because of promotional changes for the TurboTax desktop software in retail environments. While that will affect revenue timing, it won’t have any impact on the full 2025 fiscal year.

Intuit called for second-quarter earnings of $2.55 to $2.61 per share, with $3.81 billion to $3.85 billion in revenue. The consensus from LSEG was $3.20 per share and $3.87 billion in revenue.

For the full year, Intuit expects $19.16 to $19.36 in adjusted earnings per share on $18.16 billion to $18.35 billion in revenue. That implies revenue growth of between 12% and 13%. Analysts polled by LSEG were looking for $19.33 in adjusted earnings per share and $18.26 billion in revenue.

Revenue from Intuit’s global business solutions group came in at $2.5 billion in the first quarter. The figure was up 9% and in line with estimates, according to StreetAccount. Formerly known as the small business and self-employed segment, the group includes Mailchimp, QuickBooks, small business financing and merchant payment processing.

“We are seeing good progress serving mid-market customers in MailChimp, but are seeing higher churn from smaller customers,” Sandeep Aujla, Intuit’s finance chief, said on a conference call with analysts. “We are addressing this by making product enhancements and driving feature discoverability and adoption to improve first-time use and customer retention.”

Better outcomes are a few quarters away, Aujla said.

CreditKarma revenue came in at $524 million, above StreetAccount’s $430 million consensus.

At Thursday’s close, Intuit shares were up about 9% so far in 2024, while the S&P 500 has gained almost 25% in the same period.

On Tuesday Intuit shares slipped 5% after The Washington Post said President-elect Donald Trump’s proposed “Department of Government Efficiency” had discussed developing a mobile app for federal income tax filing. But a mobile app for submitting returns from Intuit is “already available to all Americans,” CEO Sasan Goodarzi told CNBC’s Jon Fortt.

Goodarzi said on CNBC that he’s personally communicating with leaders of the incoming presidential administration.

On the earnings call, Goodarzi sounded optimistic about the economy.

“Our belief, which is not baked into our guidance, is that we will see an improved environment as we look ahead in 2025, particularly just with some of the things that I mentioned earlier around just interest rates, jobs, the regulatory environment,” he said. “These things have a real burden on businesses. And we believe that a better future is to come.”

WATCH: H&R Block, Intuit shares fall after report Trump administration is considering a free tax-filing app

H&R Block, Intuit shares fall after report Trump admin considering a free tax-filing app

Technology

Bluesky CEO Jay Graber says X rival is ‘billionaire proof’

Published

12 hours ago

November 21, 2024

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Bluesky CEO Jay Graber says X rival is 'billionaire proof'

Bluesky has surged in popularity since the presidential election earlier this month, suddenly becoming a competitor to Elon Musk’s X and Meta’s Threads. But CEO Jay Graber has some cautionary words for potential acquirers: Bluesky is “billionaire proof.”

In an interview on Thursday with CNBC’s “Money Movers,” Graber said Bluesky’s open design is intended to give users the option of leaving the service with all of their followers, which could thwart potential acquisition efforts.

“The billionaire proof is in the way everything is designed, and so if someone bought or if the Bluesky company went down, everything is open source,” Graber said. “What happened to Twitter couldn’t happen to us in the same ways, because you would always have the option to immediately move without having to start over.”

Graber was referring to the way millions of users left Twitter, now X, after Musk purchased the company in 2022. Bluesky now has over 21 million users, still dwarfed by X and Threads, which Facebook’s parent debuted in July 2023.

X and Meta didn’t immediately respond to requests for comment.

Threads has roughly 275 million monthly users, Meta CEO Mark Zuckerberg said in October. Although Musk said in May that X has 600 million monthly users, market intelligence firm Sensor Tower estimates 318 million monthly users as of October.

Bluesky was created in 2019 as an internal Twitter project during Jack Dorsey’s second stint as CEO, and became an independent public benefit corporation in 2022. In May of this year, Dorsey said he is no longer a member of Bluesky’s board.

“In 2019, Jack had a vision for something better for social media, and so that’s why he chose me to build this, and we’re really thankful for him for setting this up, and we’ve continued to carry this out,” said Graber, who previously founded Happening, a social network focused on events. “We’re building an open-source social network that anyone can take into their own hands and build on, and it’s something that is radically different from anything that’s been done in social media before. Nobody’s been this open, this transparent and put this much control in the users hands.”

Part of Bluesky’s business plan involves offering subscriptions that would let users access special features, Graber noted. She also said that Bluesky will add more services for third-party coders as part of the startup’s “developer ecosystem.”

Graber said Bluesky has ruled out the possibility of letting advertisers send algorithmically recommended ads to users.

“There’s a lot on the road map, and I’ll tell you what we’re not going to do for monetization,” Graber said. “We’re not going to build an algorithm that just shoves ads at you, locking users in. That’s not our model.”

Bluesky has previously experienced major growth spurts. In September, it added 2 million users following X’s suspension in Brazil over content moderation policy violations in the country and related legal matters.

In October, Bluesky announced that it raised $15 million in a funding round led by Blockchain Capital. The company has raised a total of $36 million, according to Pitchbook.

Technology

Alphabet shares slide 6% following DOJ push for Google to divest Chrome

Published

12 hours ago

November 21, 2024

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Alphabet shares slide 6% following DOJ push for Google to divest Chrome

Jaque Silva | Nurphoto | Getty Images

Alphabet shares slid 6% Thursday, following news that the Department of Justice is calling for Google to divest its Chrome browser to put an end to its search monopoly.

The proposed break-up would, according to the DOJ in its Wednesday filing, “permanently stop Google’s control of this critical search access point and allow rival search engines the ability to access the browser that for many users is a gateway to the internet.”

This development is the latest in a years-long, bipartisan antitrust case that found in an August ruling that the search giant held an illegal monopoly in both search and text advertising, violating Section 2 of the Sherman Act.

The potential break-up would include preventing Google from entering into exclusionary agreements with competitors like Apple and Samsung, part of a set of remedies that would last 10 years.

CNBC’s Jennifer Elias contributed to this report.