Recently, Walmart shifted its listing from the New York Stock Exchange to the NASDAQ.  The move, apparently, had nothing to do with the formal policies of the exchanges, and everything to do with the fact that the NASDAQ is associated with tech stocks.  Walmart is trying to sell itself as a tech company, and part of that effort involves actually shifting exchanges.

To some extent, the benefits of this move rely on an assumption of market inefficiency, i.e., the well known phenomenon where stocks trade differently depending on index inclusion; Walmart is betting that if it’s added to the NASDAQ 100, it will trade like the rest of the index.

But it’s also an exercise in branding.  Walmart, I gather, hopes for an image revitalization; it’s signaling a business model, and a commitment to a digital business strategy, and it hopes investors will share that vision.

I’ve been thinking that, in the wake of the chartering wars, state of incorporation may serve a similar function.  I’ve previously posted that Texas has adopted an anti-woke approach to corporate governance, and I think for most firms, that’s not a particularly desirable stance; they’d much rather, at least, choose Nevada, where they get a full promise of noninterference.  But some firms may appreciate the branding – like, obviously, Musk-led companies, since Musk’s persona is intertwined with his companies.  And, apparently, crypto companies: both Coinbase and Enhanced announced moves to Texas, which fits well with the conservative/libertarian bent of the crypto industry. (There may be more practical reasons, as well; they may believe that declaring allyship with the Texas legislature will help shield them from other kinds of legal action).  Or, to put it another way, if incorporation in Delaware was once viewed as a mechanism to bond to a particular governance structure, incorporation in Texas may bond a firm to a particular political approach to business strategy (product development, marketing, hiring, etc), that could attract consumers and employees but – since I assume these groups largely do not attend to state of incorporation – is more likely intended to appeal to investors that share those political commitments.