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Avi Salzman — The New Wild West: Texas Experiments With Raw Capitalism

Light regulation and no income taxes are pulling headquarters, incorporations and stock listings to Texas — and setting up a water crisis in Corpus Christi plus a "race to the bottom" in shareholder protections.
2026-AUG-07 · Barron's · by Avi Salzman · written feature · Read ↗ · transcript · actionable insights
One-line take: A reported survey of Texas as a hypercapitalist experiment — and of the two limits now pressing on it. The pull is real and quantified: Texas passed California this year with 57 Fortune 500 headquarters, has added the most jobs of any state three years running, runs the world's eighth-largest economy, is building more natural-gas power plants than the next seven states combined while leading in wind and solar, and — through Corpus Christi, the only US port deep enough for the largest crude carriers — exports ~2.5m bbl/d of crude (roughly half of America's total, up tenfold in a decade) plus LNG. The state has extended the pitch from payrolls to legal domicile and listing venue: Musk moved Tesla's incorporation out of Delaware after a judge voided his $56B pay package; Texas lets companies block holders under 3% from filing shareholder proposals and certain suits, curbs proxy advisors, and routes disputes to its own business courts (SpaceX's bylaws do exactly that, and its filings concede this "may discourage lawsuits"). Three exchanges now claim Dallas — the Texas Stock Exchange, Nasdaq Texas and NYSE — though together the Texas venues are under 1% of US equity volume. The critique, from Americans for Financial Reform's Natalia Renta: it "has created a race to the bottom," with Nevada and Delaware already following, and with Nasdaq's 15-trading-day fast track into the Nasdaq-100 arriving around SpaceX's listing. The physical limit is water: Corpus is running dry (Choke Canyon Reservoir 8% full), residents cut usage 19% while large industrial users cut 3%, industry takes ~60% of the city's water, ExxonMobil is the biggest single user at ~13m gallons/day, and Valero — whose "blockbuster earnings" the city manager cites — is among those fighting a doubling of industrial rates. Statewide, a severe drought could leave Texas ~20% short of water demand by 2030; data centers go from <1% of state water use to 3.7% by 2030 and up to 9.1% by 2040. Gov. Abbott has halted new data-center approvals pending a water audit. (Reportage, not recommendations — every stance below is Neutral.)

1. Stocks & names mentioned

A written Barron's feature (no video), so the "At" column links to the article rather than a timestamp. Scope: names the piece frames a view on or that are central to its thesis — the incorporation/listing migration (Tesla, SpaceX, the Texas Stock Exchange, Nasdaq, NYSE/ICE), the Corpus Christi export-and-water story (ExxonMobil, Valero, Cheniere) and the Dallas financial-hub build-out (Bank of America, Goldman, JPMorgan, Schwab, Morgan Stanley). One-clause relocation mentions (Oracle, Caterpillar) and quoted-expert employers are excluded. Research legend: QT Qualtrim · SA Seeking Alpha · STK Stock Analysis.

TickerNameResearchViewWhat the article saidAt
TSLATeslaQT · SA · STK · FANeutralThe trigger for the whole incorporation shift: a Delaware judge's 2024 decision denying Musk's $56B pay package "upset the Tesla CEO and helped spur a backlash," and Musk moved Tesla's legal incorporation to Texas, "whose rules are considered friendlier to corporations than Delaware's." Tesla is also on the list of companies that relocated their headquarters to the state.read ↗
SPCXSpaceXQT · SA · STK · FANeutralThe showcase of Texas' governance model: its securities filings acknowledge bylaws forcing disputes into the Texas Business Court, which the company says "may discourage lawsuits against us and our directors, officers, other managerial officials, and other employees." It was dual-listed on Nasdaq's New York and Texas exchanges — and around its listing Nasdaq created a 15-trading-day "fast track" into the Nasdaq-100, which critics say hands average investors "inordinate risks." Also the state's southern-tip emblem, launching rockets from a beach miles from the Mexico border.read ↗
Texas Stock ExchangeTexas Stock Exchange (TXSE, private)NeutralOpened as a trading venue in July and is "still working on procuring its own listings"; will occupy the new 30-story Dallas tower (with a rolling ticker on the side) alongside Bank of America's regional HQ. CEO James Lee pitches removing "wasteful fees and onerous rules" and is "on board with the Texas-ization of corporate America" — no board-diversity disclosure, and a state constitutional amendment bars taxes on securities transactions. Liquidity is the catch: the Texas venues together are under 1% of US equity volume.read ↗
NDAQNasdaqQT · SA · STK · FANeutralLaunched Nasdaq Texas in March; president Rachel Racz calls it "more a response to our clients than a competitor" and says it "allows companies to establish a listings presence in Texas while maintaining all of the benefits of their Nasdaq listing" — trades still run on East Coast wires. The contested part: around SpaceX's listing Nasdaq changed its rules to fast-track large stocks into the Nasdaq-100 after just 15 trading days ("and then all of a sudden, their exchange gets the listing," says Renta); Nasdaq says the program makes the index better reflect the market, and Racz says the decision predated SpaceX.read ↗
ICEIntercontinental Exchange (NYSE)QT · SA · STK · FANeutralNamed alongside Nasdaq as having "ramped up their own presence in Texas" — the New York Stock Exchange is the third of the venues Dallas Mayor Eric Johnson counts when he says Dallas is "clearly winning" as "the only city in the world with three major exchanges." Passing mention; no view expressed, and the Texas venues remain under 1% of US volume.read ↗
XOMExxonMobilQT · SA · STK · FANeutralThe face of the water fight: through a joint-venture chemical plant it is Corpus Christi's biggest water user at ~13 million gallons a day, and a resident asked at a June city council meeting, "Do we want to be known as the city sucked dry by Exxon?" The company says it "continuously recycles water and is always looking for additional ways to reduce its water use." Industrial plants take ~60% of the city's water while residents cut usage 19% (2023–25) versus 3% for large-volume users.read ↗
VLOValero EnergyQT · SA · STK · FANeutralThe named refiner in the rate fight: Corpus doubled industrial water rates three years ago after years in which residents effectively subsidized big users, and several large users — Valero among them — are challenging that decision with state regulators. City Manager Peter Zanoni "did a double take" at Valero's blockbuster earnings report: "We're here worried about charging them a little bit more, and they're still fighting."read ↗
LNGCheniere EnergyQT · SA · STK · FANeutralThe named LNG export champion, quoted by port CEO Kent Britton: "Every ship that leaves Cheniere Energy [an LNG provider] powers a million homes in Europe for a month. Had it not been for the supply coming out of here, the lights go out in Europe." LNG exports went from a nonexistent industry ten years ago to one of America's most valuable exports.read ↗
BACBank of AmericaQT · SA · STK · FANeutralThe physical anchor of "Y'all Street": the half-built 30-story tower at the center of downtown Dallas, completing next year, will house Bank of America's regional headquarters together with the Texas Stock Exchange. Part of the migration economics — California taxes bank income at 10.8% while Texas has no corporate income tax, only a 0.75% margin tax on gross profit.read ↗
GSGoldman Sachs GroupQT · SA · STK · FANeutralThe most fully reported example of the Dallas build-out: Goldman has grown its Dallas-area workforce to more than 4,500 from 900 in 2017 and is building a much bigger campus a mile from its 1985-vintage downtown offices. Dallas office head Aasem Khalil, sent there in 2016 by David Solomon ("You've got to be kidding me. Did I upset you?"), now says "'Equities in Dallas' is a relic of the early '80s."read ↗
JPMJPMorgan ChaseQT · SA · STK · FANeutralCited as the scale marker for the headcount shift: JPMorgan Chase "has more employees in Texas than in New York," home to its new $3 billion-plus headquarters. Part of the 100,000+ financial jobs the Dallas area added in the past decade (now nearly 400,000).read ↗
SCHWCharles SchwabQT · SA · STK · FANeutralThe completed-migration example: Schwab moved its headquarters from San Francisco to the Dallas area in 2021 — an HQ relocation, not just a satellite office, in the same tax arbitrage that draws the banks (no corporate income tax versus California's 10.8% bank rate).read ↗
MSMorgan StanleyQT · SA · STK · FANeutralThe wealth-management pull: with Texas' former wildcatters now "Old Money barons, looking for advisors to manage their cash," Morgan Stanley "is considering building a $1.3 billion office complex" in Dallas, down the street from the Dallas Fed. Still under consideration, not committed.read ↗

2. Talking points

The setup — the global economy runs through Texas

Why AI lands here — energy is the bottleneck and Texas is closest to solving it

The experiment — and the backlash

Y'all Street — the Dallas financial build-out

The headcount and the tax math

From payroll to domicile — the incorporation raid on Delaware

What "friendlier" means — the shareholder-rights rewrite

"A race to the bottom"

Three exchanges, under 1% of volume

The index-inclusion flashpoint

The politics — and the pay gap that answers it

Corpus Christi — the workhorse port that changed America's place in the world

The bitter irony — the city is running out of water

Who pays — Exxon, Valero and the rate fight

The fixes on the table

The statewide constraint — and the policy stop

3. In plain English

A jargon-free summary of how each name is framed in the article. (Plain-language companion to the table above; renders on the ticker's consolidated page.)

TSLA — Tesla Neutral

Almost every big US company is legally "incorporated" in Delaware — meaning Delaware's courts and corporate law govern fights between the company, its board and its shareholders, no matter where the offices are. Delaware's century of business case law made that seem unassailable. Then in 2024 a Delaware judge threw out Elon Musk's $56 billion Tesla pay package, Musk moved Tesla's legal home to Texas, and the dam broke.

Tesla appears here as the trigger, not as a stock call. Its move gave Texas its proof point and set off the state-versus-state competition the article describes — Texas courting incorporations with rules "considered friendlier to corporations," and Nevada and Delaware then loosening their own protections to keep up. For an investor the read-through runs the other way from the company: a Texas-incorporated holding is one where minority shareholders have fewer tools (proposals, derivative suits) if management goes wrong.

SPCX — SpaceX Neutral

SpaceX is the clearest example of the new Texas playbook operating end to end. Its own bylaws force any shareholder dispute into the Texas Business Court, and its filings openly concede that this "may discourage lawsuits" against the company and its officers — a defensive perimeter around management that would be much harder to build in Delaware. It listed on both Nasdaq's New York and Texas exchanges, giving the state's venue its marquee name.

The contested bit is index membership. Being added to the Nasdaq-100 forces every fund tracking that index to buy the stock, so the entry rules matter enormously. Around SpaceX's listing, Nasdaq created a "fast track" letting very large new stocks in after only 15 trading days instead of the usual seasoning — critics say that pushes a barely-traded, hard-to-value company into ordinary investors' index funds before anyone knows what it is worth. Nasdaq says the change predates SpaceX and simply keeps the index representative. Either way it is the mechanism worth watching: governance chosen by the company, and index access shortened by the venue.

Texas Stock Exchange Neutral

The Texas Stock Exchange is a brand-new, privately owned competitor to the NYSE and Nasdaq, opened for trading in July and headed for the new Dallas tower it will share with Bank of America's regional headquarters. Its sales pitch is subtraction: fewer fees, fewer listing rules, no board-diversity disclosure requirement, and — thanks to a state constitutional amendment — no risk of a tax on trading its listed companies' shares.

Right now it is more statement than market. It is still "working on procuring its own listings," and all the Texas venues combined handle less than 1% of US share volume, so the practical liquidity argument for listing there does not yet exist. Its importance is as an instrument of the wider bet — that lighter regulation pulls companies in — and as a reminder of the risk that lighter regulation means fewer protections for the people who buy the shares.

NDAQ — Nasdaq Neutral

Nasdaq responded to the Texas push by opening its own Texas exchange in March. Its executives are careful to say almost nothing changes technically — the trades still run on East Coast systems — and that the venue simply lets a company plant a flag in Texas without giving up any benefit of its Nasdaq listing. Read commercially, it is a cheap defensive move to keep listings from wandering off to a new local competitor.

The awkward part is timing. Nasdaq loosened the rules for entering its flagship Nasdaq-100 index — a 15-trading-day fast track for very large stocks — right around the time it won SpaceX's listing. Nasdaq says the two are unrelated and that the change keeps the index representative of the market. Critics see an exchange competing for business by handing listings something valuable (automatic index-fund buying) sooner, with the risk landing on ordinary index investors. Neither view is settled here; the article simply lays out both.

XOM — ExxonMobil Neutral

Refineries and chemical plants need enormous quantities of water, mostly for cooling. In Corpus Christi, Exxon's joint-venture chemical plant is the single largest water user in a city whose reservoirs are nearly empty — roughly 13 million gallons a day, in a place where households have been banned from watering their lawns since late 2024. Industry as a whole takes about 60% of the city's water, and while residents cut usage 19%, big users cut 3%.

Nothing here says anything about Exxon's earnings. What it flags is a cost and permission risk that does not show up in a financial model: if the drought deepens to a Level 1 emergency, the city manager says industry — not residents — takes the 25% cuts. Water access, not oil prices, becomes the constraint on running the plant. That is the general lesson worth carrying to any water-intensive asset in a drought-exposed region.

VLO — Valero Energy Neutral

Corpus Christi discovered that its households had effectively been subsidizing industry's water for years, so the council doubled the industrial rate three years ago. Several large users, Valero among them, are contesting that increase before state regulators — while, as the city manager pointedly notes, posting blockbuster earnings. "We're here worried about charging them a little bit more, and they're still fighting."

The investment relevance is political, not per-barrel. Fighting a water-rate increase in the middle of a visible municipal water crisis, during a record profit run, is the kind of thing that hardens local sentiment and invites harsher treatment later — which for a refiner ultimately shows up as permitting friction and mandatory usage cuts rather than a line item. Refining margins are excellent; the local licence to operate is what is being spent down.

LNG — Cheniere Energy Neutral

Liquefied natural gas is gas chilled until it becomes a liquid so it can be loaded onto ships and sold overseas. Ten years ago the US exported essentially none; today it is one of America's most valuable exports, and Corpus Christi is one of its hubs. Cheniere is the name the port's own CEO reaches for to explain the scale: every ship leaving its terminal "powers a million homes in Europe for a month… Had it not been for the supply coming out of here, the lights go out in Europe."

The article does not rate the stock — it uses Cheniere to make a geopolitical point, that US export capacity is now load-bearing for allied energy security and helped keep the Iran-war oil spike from being "significantly more severe." The same physical constraint applies as everywhere else on this coast: these are water-hungry, permit-dependent facilities in a region rationing water.

BAC — Bank of America Neutral

Bank of America's regional headquarters is the anchor tenant of the half-built 30-story Dallas tower that will also house the Texas Stock Exchange — the physical symbol of "Y'all Street." It is evidence of the migration rather than a view on the bank.

The arithmetic behind these moves is simple and large: California taxes bank income at 10.8%, while Texas levies no corporate income tax at all — only a 0.75% margin tax on gross profit. For a big financial institution, that difference is worth millions a year before any consideration of rents, wages or politics, which is why so much of the industry's growth is landing in one metro.

GS — Goldman Sachs Group Neutral

Goldman is the article's fullest illustration of how far the Dallas shift has gone. Its local headcount is up to more than 4,500 from 900 in 2017, and it is building a much larger campus. The human detail carries the point: the executive now running the office treated a 2016 posting there as a punishment ("Did I upset you? Did I do something wrong?") and now calls the old Liar's Poker insult, "Equities in Dallas," "a relic of the early '80s."

No stance on the stock is expressed. As a signal, though, a bulge-bracket firm quintupling a regional workforce and committing to a purpose-built campus is a durable, capital-committed vote on where the business is going — the kind of migration evidence that shows up in real estate and local wage data long before it shows up in anyone's earnings model.


Summary derived from the public Barron's article (full text saved in transcript.txt) for personal study. Not investment advice. © Barron's / Dow Jones for source material.