Karissa Bell

The Twitter v. Elon Musk trial is now on hold as the two sides work to hammer out a deal for Musk to complete his buyout of the social media company. On Thursday, Judge Kathaleen St. Jude McCormick, Chancellor of Delaware’s Chancery Court, stayed the trial until October 28th, following a motion from Musk’s lawyers to call off the trial.

However, if the two sides aren’t able to close by the end of the month, a trial could be back on. “If the transaction does not close by 5 p.m. on October 28, 2022, the parties are instructed to contact me by email that evening to obtain November 2022 trial dates,” McCormick wrote.

The stay comes less than two weeks before the five-day trial was scheduled to begin, and on the same day that Musk was scheduled to be deposed in the case. It’s the latest sign that Musk and Twitter are moving closer to a deal. Earlier in the week, Musk said he would agree to a deal at the original price of $54.20 a share, provided he finalized his financing and that the trial was adjourned. Twitter also confirmed it wanted to close the deal on its original terms.

But since then the two sides have still been arguing over the particulars of the arrangement. Bloombergreported Musk wanted a provision that would still allow him to sue Twitter over the number of bots on the platform, while The New York Times reported Twitter didn’t want to call off the trial until its shareholders had been paid.

Musk’s lawyers alluded to the disagreements in their filing, writing that “Twitter will not take yes for an answer,” claiming the company was endangering the deal. McCormick didn’t weigh in on the disagreement, though she noted that Twitter has opposed Musk’s motion to stay the trial.

Lawyers for Elon Musk have officially asked to cancel the upcoming trial with Twitter, as the two sides attempt to negotiate a deal. In a new court filing, Musk’s lawyers asked the judge to call off the trial, which is currently scheduled to begin October 17th.

Earlier this week, Musk’s camp had proposed proceeding with the original deal, to buy Twitter at $54.20 a share, contingent on Musk’s financing going through and the adjournment of the trial. Twitter responded that it was also intent on closing the deal.

While that certainly seemed to put the two sides a lot closer to an agreement, it wasn’t an immediate end to the litigation. The New York Times has since reported that Twitter does not want to call off the trial until a deal is finalized and the company’s shareholders have been paid. There are likely other sticking points, too. Bloomberg reported Tuesday that “Musk is also seeking to reserve his rights to file a fraud suit over his claims the platform’s executives misled him and other investors about the number of spam and robot accounts.”

In their latest filing, Musk’s lawyers confirm the disagreement over the trial, writing that Twitter is now endangering the deal. “Twitter will not take yes for an answer,” Musk’s lawyers write. “Astonishingly, they have insisted on proceeding with this litigation, recklessly putting the deal at risk and gambling with their stockholders’ interests. Instead of allowing the parties to turn their focus to securing the Debt Financing necessary to consummate the transaction and preparing for a transition of the business, the parties will instead remain distracted by completing discovery and an unnecessary trial.”

Notably, the filing comes on the same day Musk was scheduled to be deposed in the case. The deposition was delayed — for the second time. Musk’s lawyers say they expect the deal could close “on or around October 28.”

Update 6 PM ET: The judge in the case has stayed the trial until October 28th, the date Musk’s lawyers said they expected to close. “If the transaction does not close by 5 p.m. on October 28, 2022, the parties are instructed to contact me by email that evening to obtain November 2022 trial dates,” Kathaleen St. Jude McCormick wrote. 

Twitter has agreed — once again — to Elon Musk’s proposal to buy the company for $54.20 a share. In a statement, Twitter confirmed it had received Musk’s letter that “the intention of the Company is to close the transaction at $54.20 per share.”

The agreement follows months of legal drama after Musk tried to back out of his original agreement to buy the company for $44 billion this spring. The two sides were set to go to trial later this month as Twitter attempted to force Musk to keep up his end of the agreement. Musk had claimed Twitter had misled him about the number of bots on the platform, and had raised concerns about issues disclosed by the company’s former head of security who filed a whistleblower complaint against the company.

But Musk, once again, abruptly reversed course on Tuesday, telling Twitter that he would be willing to proceed with the original terms of the deal. In the letter filed with the SEC, Musk’s lawyers say they will go ahead with the agreement first struck in April if Delaware Chancery Court will “adjourn the trial and all other proceedings related” to the ongoing lawsuit.

It’s not yet clear when the acquisition could actually close. Twitter’s shareholders have already voted to approve the deal, but both sides will now also need to wait for Delaware’s Chancery Court’s response.

Musk, who has said he intends to take Twitter private, could eventually bring dramatic changes to Twitter. He has publicly mused about opening sourcing the site’s algorithms and taking a more lax approach to content moderation. In messages to CEO Parag Agrawal, made public last week, he also stated that he wanted to “unwind permanent bans, except for spam accounts and those that explicitly advocate violence.”

Elon Musk wants to own Twitter after all. The Tesla CEO has decided he wants to go ahead with the deal he originally struck to buy the social media company for $54.20 a share, Bloomberg reports.

News of the proposal comes less than two weeks before the two sides were set to go to trial in Delaware’s Court of Chancery over Musk’s attempt to get out of that deal. He has cited concerns about the number of spam and bot accounts on Twitter, and later added allegations from the company’s former head of security turned whistleblower to his suit.

Twitter didn’t immediately respond to a request for comment. But CNBC reported that trading of Twitter’s shares was halted following the report. 

If the two sides were to agree to go ahead with the terms of the original deal, it would end a months-long legal battle that has grown increasingly messy. Last week, hundreds of Musk’s private messages were published in legal filings. The texts detailed how Musk’s negotiations with Twitter had broken down in the spring, prompting him to announce he would buy the company and take it private.

But not long after he agreed to buy the company, Musk began questioning Twitter’s accounting of how many bots and spam accounts are on the platform. Musk claimed that Twitter had vastly undercounted the number, and in a legal filing accused the company of fraud. Twitter’s lawyers maintained his estimates were inaccurate and his claims about bots were merely a “pretext.” They cited text messages in which Musk, speaking to his banker at Morgan Stanley, said he was worried about Putin’s moves in Ukraine and a potential “World War 3.”

Update 3:18 PM ET: Musk’s letter to Twitter’s lawyers was published in an SEC filing. In the note, Musk’s lawyers say they will go ahead with the original terms of the deal if Delaware Chancery Court will “adjourn the trial and all other proceedings related” to the ongoing lawsuit. 

Update 3:38 PM ET: Twitter has confirmed that it received Musk’s letter, and now says it intends to close the deal for $54.20 a share.