According to reports, In November 2021, JP Morgan Chase & Co sue Tesla for $162 million over Tesla CEO Elon Musk’s tweets in 2018 suggesting that he could take the electric car maker private, prompting a market fall.
Tesla was accused of “flagrantly” breaking a pact that should have triggered payments to JP Morgan.
According to JP Morgan’s lawsuit, filed in a Manhattan federal court, the two firms inked an agreement in 2014 that authorized the bank to buy Tesla shares at a defined price and date.
Under the terms of the agreement, Tesla sold JP Morgan warrants that allowed the bank to buy Tesla stock if the “strike” price was lower than the stock’s current price when the warrants expired in June and July 2021.
Elon Musk attempted Tesla’s privatization in the tweet, a move he later abandoned. Despite the move’s halt, Elon Musk’s tweet prompted volatility in Tesla’s stock price, and he was fined by a US financial regulator.
Tesla filed a countersuit in response to JPMorgan Chase & Co.’s lawsuit alleging that CEO Elon Musk’s notorious “funding secured” tweet caused market instability and losses, Reuters reports.
Tesla struck back against JPMorgan Chase & Co in a fresh filing filed in Manhattan Federal Court on Monday, accusing the bank of pursuing a “windfall” in the disputed agreement.
Tesla claims JPMorgan acted in “bad faith and avarice” when it requested a $162.2 million payment for damages incurred when Musk showed interest in taking Tesla private at $420 per share in 2018.
Tesla contends in its countersuit that JPMorgan’s lawsuit is unreasonable and that it could be retaliation for failed business deals in the past.
“JPMorgan pressed its exorbitant demand as an act of retaliation against Tesla both for it having passed over JPMorgan in major business deals and out of senior JPMorgan executives’ animus toward Mr. Musk.”
Tesla claimed in the lawsuit.
Regarding the warrant restructuring, Tesla stated that JPMorgan “dealt itself a pure windfall” as a result of Tesla’s skyrocketing stock price which it has benefited from.
JPMorgan’s move, according to Tesla’s November statement, was “unreasonably swift and represented an opportunistic attempt to take advantage of changes in Tesla’s stock volatility.”
