Musk first embarked on significant stock sales late last year, with a large part of the proceeds from stock option exercises being paid in tax. At the time, he polled his followers on Twitter about whether they wanted him to sell part of his stock and pay tax, before going on to sell about US$16.5b worth of shares.
Under the terms of his Twitter offer, Musk is personally responsible for financing up to US$33.5b of the acquisition, with the rest coming from debt, though he has announced commitments from other investors of more than US$7b.
The Twitter agreement provides for a US$1b break-up fee. But it also requires "specific performance", meaning that Musk must go ahead with the purchase unless he can prove that he was misled or a "material adverse event" has occurred at Twitter. He could also walk away if the debt needed to close the deal is no longer available.
That has raised the stakes ahead of the October court hearing, leaving Musk at risk of being ordered to go ahead with the deal on its original terms or forced to try to reach an out-of-court settlement with Twitter.
Written by: Richard Waters
© Financial Times