Coinbase's Implausible Explanation for DExiting

What are Coinbase's real reasons for reincorporating from Delaware to Texas?

Coinbase, Inc., yesterday filed a Schedule 14C with the SEC.¹ It disclosed that:

… on November 4, 2025, stockholders of the Company holding a majority of the voting power of our outstanding shares of capital stock entitled to vote as of the Record Date acted by written consent in lieu of a meeting of stockholders to approve the reincorporation of the Company from the State of Delaware to the State of Texas by conversion (such reincorporation, the “Reincorporation,” and such written consent, the “Written Consent”).

The “Consenting Stockholders” are [“Brian Armstrong and Fred Ehrsam” or “trusts established by or associated or affiliated with Mr. Armstrong or Mr. Ehrsam. Mr. Armstrong is the Company’s Chairman of our Board of Directors and Chief Executive Officer. Mr. Ehrsam is a member of our Board of Directors,”] As of the close of business on October 31, 2025, the record date for the Written Consent, the Consenting Stockholders together held 12,407 shares of the Company’s Class A common stock and 41,464,889 shares of the Company’s Class B common stock, representing approximately 78.40% of the voting power of our outstanding shares of capital stock entitled to vote.

The WSJ reported:

Delaware has long been the legal home of most big U.S. companies, but a corporate exodus gained steam after Elon Musk decided last year to reincorporate Tesla in Texas, upset about a court ruling against his multibillion-dollar 2018 pay package. He moved the legal home of SpaceX to Texas, and that of his brain-implant company, Neuralink, to Nevada.

As I explained in my article, DExit Drivers: Is Delaware’s Dominance Threatened?, historically most companies leaving Delaware to reincorporate elsewhere were micro- and even nano-caps. Since Tesla, however, there have been a handful of larger companies following it to Texas or, in some cases, Nevada. As the Journal observed:

Coinbase, a cryptocurrency exchange, has a market value above $80 billion, meaning its move could encourage other companies to follow suit.

Why is Coinbase moving? The Journal reports:

Coinbase Chief Legal Officer Paul Grewal said in an opinion piece in The Wall Street Journal Wednesday that the company is pursuing the reincorporation because Texas’ legal framework is more predictable and efficient than Delaware’s.

Is that a plausible explanation?

No.

But to see what’s really going on, we need to parse both that opinion piece and the disclosures Coinbase offered in its Schedule 14C.