Twitter, Elon Musk agree to delay deposition: Report
Yahoo Finance’s Alexis Keenan breaks down reports of Elon Musk and Twitter agreeing to postpone the billionaire’s deposition.
Video Transcript
- All right. Well, Twitter shares, they are up today. No, looks like, well, they are down just slightly. And that is after investors await progress on the newly revived discussions with Elon Musk. The latest-- Musk and the group are reportedly delaying the billionaire's long-awaited deposition after his decision to proceed with the $44 billion deal, also amid discussions over financing.
Reuters reporting that Apollo Global Management and 6 Street Partners, who had been looking to stump up some of the money, no longer are in talks. Apollo Global Management is a parent company of Yahoo Finance. Yahoo Finance's Alexis Keenan joins us now. And Alexis, there was speculation yesterday that Twitter wanted Musk lawyer to disclose whether he reacted to an anonymous email. What do we know about this?
ALEXIS KEENAN: Yeah, Jared. So there was some speculation. And it was about this May 6 email that Twitter was asking the judge for more information. The judge saying that Musk might have to turn over more details on an anonymous sender that sent an email to Musk's attorney Alex Spiro. And it was thought that it might be connected to Peiter Zatko, the Twitter whistleblower that has caused so much upheaval in terms of spam and bot counts and Twitter security on its platform.
But in an affidavit to the judge today that was filed, Spiro said this. "To date, I have taken no actions of any kind with respect to that May 6 email." So kind of putting to bed that part of the speculation. But as you know, look at the share price today, reflecting a lot of doubt still, not quite leveling off to that $54.20 price that Musk has now re-propose, that he will close the deal there.
The "Wall Street Journal" reporting that the parties are going late into talks late Wednesday. Still unsettled about how to move forward exactly, despite the fact that Musk has said in a letter that is now filed with the SEC and that the court has its hand on saying that he'll go forward on those original terms. But here's the problem. There's some fuzzy language in that letter. And what it says is it's pending Musk's receipt of debt financing. And what they're talking about there is the approximate $12.5 billion that's coming from Morgan Stanley and is committed from Morgan Stanley.
But what's the holdup really? It could be that debt financing language. It could also be possibly executive and employee compensation that needs to come out of this deal. Twitter might want some more terms around that. And also, they might want indemnities to be inserted into this new re-up deal. We don't know for sure, though. But let's focus back on that financing for just a minute. It was back in April, on the 21st, that Musk had said through his lawyers that more information on Twitter's fake accounts, those spam and bot accounts, was needed for Musk's financing.
So I would think that Twitter would want to clarify that is indeed not going to be the case if he is going to go through with this deal. Plus, added to that, banks can independently assert a claim that a material adverse event has occurred. That would be a change, a major change in conditions that they could assert and say, well, that changes whether we can offer this financing to Musk. Now, the lawyers that I've talked to have said that's probably not going to be the case.
But we still have to wait and see here. But they do say that there's one key thing to watch for. And that is that deposition of Elon Musk that was scheduled to go forward today, but is now delayed. All these M&A lawyers that I'm in talks with, they say that certainly Twitter would want to have Musk's testimony before they go forward with any trial. The trial still on the books, Jared, for October 17.
- We'll have to see what comes of this.
