COULD this month be a time of reckoning for billionaire tech entrepreneur Elon Musk? Musk’s fate is left at the mercy of a small but significantly powerful court in the state of Delaware, United States of America (USA).

The potential outcomes are thus: Musk will be forced to follow through with the US$44 billion purchase of Twitter or he will be made to pay US$1 Billion to Twitter for exiting the buy-out deal. Either way, Twitter has not budged its position that Musk must complete the purchase.

The big question remains, ironically, how will one of the world’s richest men finance the deal? Musk made a pitch to the Delaware Court that he would proceed with the buyout, seemingly borrowing more time. The Judge of the Court of Chancery accepted it.

“This action is stayed until 5pm on October 28, 2022 to permit the parties to close on the transaction. If the transaction does not close by 5pm on October 28, 2022, the parties are instructed to contact me by email that evening to obtain November 2022 trial dates,” Judge Kathaleen McCormick according to DEADLINE.

Twitter wanted Musk to close the deal by October 17 which was the official commencement date of the five-day trial. “At a minimum…Defendants should be arranging to close on Monday, October 10. But they aren’t. Instead they refuse to commit to any closing date. They ask for an open ended out, at the expense of Twitter’s stockholders (who are owned $44 billion plus interest), all the while remaining free to change their minds again or to invent new grounds to avoid the contract….

“Until Defendants commit to close as required, Twitter is entitled to its day in Court, to demonstrate its entitlement to specific performances and prove defendants’ breaches so as to ensure complete relief in the event the closing should for any reason not occur. Defendants can and should close next week. Until they do, this action is not moot [as Musk’s motion insisted] and should be brought to trial,” Twitter has maintained, according to media reports.

It appears that Musk’s ability to pay for the deal rests largely on the performance of his Tesla shares. Those shares, however, have seen a decline, according to Reuters. “Tesla shares fell more than six per cent on Friday, heading for their worst weekly drop since March 2020, as investors worry Musk may dump more shares after Tesla announces its quarterly earnings on Oct. 19,” Reuters said.

“Musk has pledged to provide $46.5 billion in equity and debt financing for the acquisition, which covers the $44 billion price tag and closing costs. Banks, including Morgan Stanley and Bank of America Corp, committed to provide $13 billion of debt financing to support the deal.

“Experts say banks’ commitments to the deal are firm and tight, limiting their ability to walk away from the contract despite prospect that they may face major losses.
“Twitter on Thursday cited one of the banks as saying that Musk had not communicated to them that he intends to close the transaction. Musk said that banks were ‘working co-operatively to fund the close’ on or around Oct. 28.

“Musk’s $33.5 billion equity commitment would include his 9.6 per cent Twitter stake, which is worth $4 billion, and the $7.1 billion he secured from equity investors, including Oracle Corp co-founder Larry Ellison and Saudi Prince Alwaleed bin Talal,” analysts Hyunjoo Jin and Chibuike Oguh wrote in Reuters. Musk still needs US$22.4 billion to cover the equity financing portion of the deal, the agency. It noted additionally, that the billionaire could also sell more of his shares in Tesla or turn his attention to SpaceX. Whatever the case, the clock is ticking on Musk and it’s unlikely he will be allowed further clemency.