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Judge delays Twitter-Musk until Oct. 28

Yahoo Finance's Alexis Keenan breaks down a Delaware judge's decision to allow Twitter and Tesla CEO Elon Musk to delay trial while they try to negotiate a deal agreement.

Video transcript



BRAD SMITH: The Delaware judge overseeing the trial between Twitter and Elon Musk has put the legal battle on a brief hold to give him time to complete the deal. This comes after Musk's sharp U-turn that he's made. But is he for real this time? That's the big question. Yahoo Finance's Alexis Keenan joins us now with more analysis. Let's start with the state. Is it clear how long the temporary stay is effective for here?

ALEXIS KEENAN: It is. So the judge has said that she will give until October 28, so 11 more days from when that original trial was scheduled, to give the parties time to figure this out, but really, for Musk to close the deal. She's putting some pressure on Musk here because in Musk's request for this pause of the trial, what his lawyers asked for was additional time. It didn't have a date, though. What they said is that they think the banks can close on or around October 28, not on necessarily that date. So he's going to have to make things happen here if he's going to make good on this so-called promise.

Also, the judge went on to say, if the transaction does not close by 5:00 PM on that October 28 date, the parties are instructed to contact her by email that evening to get November trial dates. So if it doesn't happen, you better believe that she is going to say, we're setting the trial now for November on the calendar.

Also, the request by Musk also gives two possible scenarios. So if we're trying to evaluate how serious he is about closing, we can look to the language that he gave to the judge. And what his lawyers say is that one scenario is the deal closes. They say, that's by far the most likely, that's the language that they use. Second, they say the deal does not close because the debt funding is not there. They say that's much less likely. In which case, Twitter has some new facts on which it can assert new claims.

So not necessarily feeling like super strong language, but, at the same time, the lawyers say this is a much more likely scenario and that they are working diligently with the banks to get it done. They just need more time that this debt financing, this $12.5 billion, doesn't just come together overnight.

JULIE HYMAN: Right. Even though, supposedly, it was lined up before, right? So one little thing here, in that even though October 28 is the deadline, if then she's not setting the court date until November, there does seem to be a little wiggle room there. Because even if they don't make it by 5:00 PM on October 28, then, say, she sets the date for November 5. If presumably, they close the deal before November 5, she'd cancel the trial. So there's a little-- there's a little bit, not much, but a little wiggle.

ALEXIS KEENAN: A little bit more. I could envision a scenario where if it's the 29th is the new date because they just need a little more time, I would think that they could come to an agreement on that date. So still, a big question mark looming over this, but definitely some commitments by Musk. He also submitted with his court filings, $27 billion commitment on the equity side, among that $33 billion that he had previously committed. So he's trying to show the court, at least through his papers, that he's coming up with some of this money. And he says, he is working with the banks.

BRAD SMITH: All right. Well, Twitter shares sitting pretty market at about $49 at this point in time. And Tesla shares have moved lower by about 10% over the course of this week with all of this taking place.