Elon Musk vs Twitter: A Delaware judge suspended Twitter Inc.’s legal actions against Elon Musk on the eve of trial, according to a court document submitted on Thursday, to give the entrepreneur time to raise the $44 billion necessary to buy the social media platform.
In order for Musk, the CEO of electric vehicle manufacturer Tesla Inc., to finance the deal, the court case was postponed until October 28 at 5 p.m. EDT.
Judge Kathaleen McCormick gave the parties instructions to get in touch with her to schedule a trial for November if the agreement was not finalised by her deadline. By mutual agreement, Musk’s deposition on Thursday was postponed because his trial was scheduled to start on October 17.
Investors appeared encouraged that the order will put an end to the deal’s many days of uncertainty.
Twitter stock rose 2.7% in after-hours trading after falling by 3.7% at the close of business.
The world’s richest billionaire said this week that, pending loan funding, he will purchase Twitter at the $54.20 per share price set in April.
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For Musk, who had been battling Twitter in court for months in an effort to get out of the arrangement, that was a turning point. Among other things, he claimed that Twitter had misled him about the number of real users of its platform.
Musk said that while banks were helping to finance the transaction, he still needed more time in a court document released on Thursday. Musk argued that a brief delay was still preferable to the several months required for a trial and appeal.
Twitter argued in a court filing that the judge should reject the concept and that Musk’s plan was “an invitation to additional mischief and delay,” demonstrating the lack of trust between the parties.
Twitter claims that Musk will have to stop operations the following week.
According to testimony given in court on Thursday, a corporate representative for a lending bank claimed that Musk has yet to submit them a borrowing notice and has not made explicit his plan to close.
Major banks that promised to fund $12.5 billion, or roughly 28% of the deal, may suffer significant losses because the quick pace of interest rate hikes has increased market volatility and diminished demand for leveraged financing.
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Randy Frederick, managing director of trading and derivatives at the Schwab Center, claims that there is still some doubt regarding Elon’s ability to secure the necessary funding for the transaction.
After raising $15.4 billion by selling Tesla shares this year and relying on significant investors for a portion of the cash, speculation surrounds whether Musk will sell additional shares of the electric vehicle manufacturer’s stock to finance the deal.
“Financing will ultimately be completed, one way or another. At this point, the only thing left to do is negotiate the terms” Concenture Wealth Management’s managing director, Robert Gilland, said.
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