Tesla Inc (NASDAQ:TSLA) CEO Elon Musk will have to shell out $1 billion to exit the $44 billion deal to purchase Twitter Inc (NYSE:TWTR), according to a filing with the U.S. Securities and Exchange Commission.
What Happened: The deal comes with a deadline of Oct. 24, 2022, and can be extended for six months to meet antitrust and foreign investment clearances, according to the filing.
Musk committed to providing a $21 billion equity commitment and has secured $25.5 billion of debt and margin loan financing, according to Twitter.
See Also: How To Buy Twitter (TWTR) Shares
Why It Matters: Twitter will have to pay the same amount under specified limited circumstances, according to the filing.
The social media platform said in its filing that it is subject to “no-shop” restrictions. This means the company and its founders are restricted from getting offers from other buyers for a period of time.
Musk secured a Twitter takeover on Monday after the company’s board accepted his offer to purchase the platform for $54.20 per share.
Price Action: On Tuesday, Twitter shares closed 3.9% lower at $49.67 in the regular session and fell 0.9% in extended trading. On the same day, Tesla shares closed 12.2% lower at $876.42 and fell 0.2% after the bell.
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