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COVID: Tesla's Elon Musk Joins Exodus From Bay Area; Moves From Silicon Valley To Texas

PALO ALTO (CBS / AP) -- Like thousands of other San Francisco Bay Area residents during the COVID pandemic, Tesla CEO Elon Musk says he's departed Silicon Valley and moved to Texas.

Musk told The Wall Street Journal in an interview Tuesday that he has moved to Texas, saying that California has taken innovators for granted.

He also could be moving because Texas has no income tax. Musk's 18% stake in Tesla is worth billions.

The newspaper didn't say where he had moved in Texas, but it's likely to be close to Austin, where Tesla is building a new factory. SpaceX, another Musk-led company, has operations nearby. Musk told the newspaper he's been working on the move for months.

Musk had threatened to relocate Tesla's Palo Alto, headquarters and future manufacturing to Texas earlier this year during a high-profile spat with county officials over whether Tesla's factory in Fremont should stay closed due to coronavirus restrictions.

He likened the current business mode in California to an overconfident sport team in the WSJ article.

"They (successful sports teams) do tend to get a little complacent, a little entitled, and then they don't win the championship anymore," he said. "(California) has been winning for a long time. And I think they're taking them for granted a little bit."

He's not alone. Just last week, Hewlett Packard Enterprise (HPE) said it would move its company headquarters from San Jose to the Houston area.

According to Texas Gov. Greg Abbott's office, the business computing company will open its new headquarters in early 2022 in the suburb of Spring.

"We are excited that Hewlett Packard Enterprise has chosen to call Texas home, and I thank them for expanding their investment in the Lone Star State by relocating their headquarters to the Houston region," Abbott said. The governor touted that HPE would join more than 50 Fortune 500 companies based in Texas, and 22 in the Houston area alone.

HPE CEO Antonio Neri called Houston "an attractive market to recruit and retain future diverse talent." Neri also said the firm was was not abandoning its Bay Area roots.

"We intend to maintain a robust presence in our historical birthplace of Silicon Valley as a hub for technological talent and innovation, including housing the headquarters of Aruba at our San Jose campus that opened in 2019," said Neri in an emailed statement. "There are no layoffs associated with this move, and we are committed to both markets as key parts of our talent and real estate strategies in a post-pandemic world."

On the stock offering, Tesla Inc. said in a regulatory filing that the sales would be made "from time to time." The stock will be sold through 10 different brokerage houses, and each will get up to a 0.25% commission.

Wedbush's Daniel Ives said in a client note that the current move makes sense given the strong rally in the company's shares and investors' keen interest in the electric vehicle market.

Tesla's stock has exploded this year, rising more than 600%. It closed Tuesday up 1.3% at $649.88.

The company has to finance some big-ticket capital spending this year because it's building a new factory in Germany and outside of Austin. It's also gearing up to roll out its new "Cybertruck" pickup and a semi sometime next year.

The company posted a $331 million net profit for the July through September period, its fifth straight quarter of profitability. But as in previous quarters, the company relied heavily on $397 million it earned from selling electric vehicle credits to other automakers so they can meet government fuel economy and pollution regulations.

Tesla could post its first full-year profit when it reports fourth-quarter earnings early next year.

© Copyright 2020 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.

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