Abstract: We examine the equity market impact of SB 21, a 2025 overhaul of the Delaware General Corporation Law that makes safe-harbor “cleansing” of conflicted controller transactions more readily available. Using a standard event-study design with a control group comprising the 1,000 largest publicly traded U.S. firms incorporated outside Delaware, Delaware incorporated firms experience significantly negative cumulative abnormal returns (CARs) at the announcement of SB 21, about -1.4% relative to these non-Delaware peers. Cross-sectionally, underperformance is concentrated in firms with larger blockholders and in dual-class firms: firms with voting blocks above 15% exhibit about 1.6% more negative CARs, and dual-class firms’ CARs are lower by roughly 2.4%. Our findings are robust across event windows and to alternative risk-adjustments (e.g., multi-factor benchmarks). Complementing the price evidence, we document a mechanism consistent with portfolio rebalancing: relative to passive funds, active mutual funds reduced their exposure to Delaware firms and, within Delaware holdings, to firms with more concentrated control following the announcement. On balance, the evidence implies that SB 21 reduced the shareholder value of Delaware firms overall, with the largest losses borne by companies where controller conflicts are most salient.