Overheard

• "In the next two or three months, any disaster could happen … so we're just preparing for the worst case scenario." — Masa Son said his $80 billion cash pile was in case of emergency.
• "I might be missing something about Bitcoin." — Ray Dalio admitted that his bearish take on the cryptocurrency might be wrong.
• "They see him as a parasite on the regulated financial system … and also they see him as a symbol of income inequality and wealth disparities." — An anonymous head of China for an asset management firm told Nikkei that Chinese authorities don't view Jack Ma very positively.
• "Caution strongly advised with SPACs." — Elon Musk is wary of the hot new thing.

The Big Story

Is tax flight the next big thing?

Keith Rabois is having a big month. Not only does he have seven portfolio companies going public, he's also moving! Earlier this week, he announced that he's leaving the Bay Area and setting up shop in Miami, instead.

• While most of the discussion around the move centered around Bay Area politics (Rabois thinks "San Francisco is just so massively improperly run and managed that it's impossible to stay here"), there's something else going on here too. As Rabois admitted, in Florida "there's no state income tax."

Rabois isn't the only person to move because of taxes. Palantir co-founder Joe Lonsdale said he's moving 8VC to Austin because of California's high taxes. "I could either put that money toward things that are fixing the world or give it to the California state government," he told CNBC.

And it's not just about income tax. Vieje Piauwasdy is director of equity advisory at Secfi, which helps startup employees understand and manage their equity, and he told me that he's increasingly coming across people leaving California to save on their equity taxes.

• Startup employees typically get taxed twice on their equity: once when they exercise their options and again when they sell their shares. That first tax is typically charged by the state you earned the options in, but the latter is charged based on where you sell them.
• Some people, Piauwasdy said, are choosing to exercise their options while their value is low, move to a low-tax state like Texas, and sell them there. "Instead of paying 37.1% on any further appreciation," he said, "they're only paying 23.8%." On large sums of equity, "it's 100% worth it to move to these states just to save that 13.3%." Austin is the most popular destination, he said, followed by Denver and Utah.

Tax gains often outweigh any salary adjustments that employers might make, Piauwasdy said. In fact, sometimes those lower salaries are instantly made up for by lower income taxes.

• To be clear, lower taxes aren't the only reason people are moving. Real estate prices and quality of life are playing a big part of it too. "I wouldn't say it's the sole driver for moving, but it's a large portion of why we see employees leaving California" Piauwasdy said.
• And the rise of remote working is making this option available to many more people than ever before.

USPS data shows that thousands of people are leaving San Francisco, with Florida a top destination. Eventually, this could have significant repercussions: What does a state do if many of its high-earners are no longer around to fill up its tax base? We might not find out this year, or next, but California might want to start thinking about it.

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Up to Speed

• Monday: Airbnb released its S-1. We've got a full breakdown of it on Protocol: The company's had a testing year, but it did make a profit last quarter. Also Monday, Tesla was confirmed to finally be joining the S&P 500.
• Tuesday: Huawei sold its Honor division to a consortium of smartphone dealers and agents for an undisclosed price. Previous reports estimated it would sell for around $15 billion. Also Tuesday, Robinhood was reported to be considering a Q1 IPO, and Tsinghua Unigroup was reported to have defaulted on a $198 million bond.
• Wednesday: Google launched its new Google Pay app, which now supports P2P payments and bank account management. Affirm filed its S-1, revealing that 30% of its revenue last quarter came from Peloton. Ed tech had a big day, with Duolingo raising at $2.4B and Udemy at $3.25B (the latter reportedly led by Tencent). And Muddy Waters accused Joyy of being a fraud just a day after Baidu announced a partial acquisition. Joyy's shares plunged, before recovering somewhat on Thursday.
• Thursday: Roblox filed its S-1, noting the significant geopolitical threats to its Chinese joint-venture with Tencent. DirectBooks, a new platform for bond issuance founded by major investment banks, finally launched.

Coming Up

• Expect a very quiet holiday week, for the most part. There are some earnings to look out for on Tuesday though: Xiaomi, VMware, Autodesk, Dell, Analog Devices and HP are all reporting then. U.S. markets are closed Thursday.