JPMorgan sues Tesla for $162 million in warrants dispute around Elon Musk take-private tweets


Products You May Like

In this article

Maja Hitij | Getty Images News | Getty Images

JP Morgan Chase filed suit against electric vehicle maker Tesla in a dispute over warrants, according to court filings out Monday. The bank is seeking $162.2 million plus interest, attorneys’ fees and expenses.

JP Morgan alleges that Tesla has breached the terms of a contract that the companies signed pertaining to re-pricing the warrants.

Tesla was supposed to deliver shares, or cash, if its share price went above a contractually set “strike price” by a certain expiration date, the complaint says.

But a dispute arose when JP Morgan made adjustments to the value of the warrants when Tesla CEO Elon Musk tweeted in August 2018 that he was considering taking the company private for $420 a share, and again when he rescinded the idea of privatizing Tesla a few weeks later. JP Morgan claims it had a contractual right to make those adjustments, while Tesla said in a letter that they were “unreasonably swift and represented an opportunistic attempt to take advantage of changes in volatility in Tesla’s stock,” according to the filing.

In the 16 months that followed, Tesla stock bottomed out at a three-year low just under $177 per share in June 2019, before shooting past $420 per share in December that year. Musk was later charged with securities fraud by the SEC. Tesla and Musk agreed to pay $20 million each to settle the suit.

Tesla shares closed on November 15 at $1,013.39.

The complaint says, “In total, Tesla failed to deliver 228,775 shares of its common stock, leaving JPMorgan with an open hedge position equal to that shortfall.”

Read the full complaint here.

Products You May Like

Articles You May Like

Samsung XR Headset Could Be Available for Developers in October, Launch in 2025: Report
Indkal Technologies Signs Licensing Deal to Launch Acer Smartphones in India Under Rs. 50000
Kaspersky Exits U.S. Market Following Commerce Department Ban
Google’s Pixel Watch 3 Tipped to Get UWB Support, Brighter Display, Up to 420mAh Battery, More
Gemini AI Assistant Can Now Answer Questions, Perform Tasks Even When Android Device Is Locked

Leave a Reply

Your email address will not be published. Required fields are marked *