JPMorgan says Tesla owes him $ 162 million because of a tweet from Elon Musk.

Elon musk Twitter post on the privatization of Tesla He is still pursuing him, more than three years later. JPMorgan Chase sued Tesla ...


Elon musk Twitter post on the privatization of Tesla He is still pursuing him, more than three years later.

JPMorgan Chase sued Tesla in federal court on Monday, asking for $ 162 million the bank says the electric automaker owes it under a stock option contract the companies signed in 2014. At the heart of the dispute is a provision in the contract that allows JPMorgan to change its details after any “extraordinary event” at Tesla.

The bank claims that a tweet from Aug. 7, 2018, in which Mr Musk, the chief executive of Tesla, said he had “secure funding” to privatize Tesla at $ 420 a share – filled the bill because it drastically reduced Tesla’s share price. . Tesla executives disagree.

The JPMorgan lawsuit indicates that Tesla sold warrants for shares of JPMorgan in 2014 “as part of a larger transaction in the capital markets.” Under the deal, if Tesla’s stock was at or above a certain price on the day the options expired seven years later, it would have to pay JPMorgan a certain amount of money – the difference between the actual price of the share on that date and the “strike price” that the two parties had set for themselves.

The exercise price was initially set at just over $ 560 per share. Then came Mr. Musk’s tweet about a deal to privatize Tesla at $ 420 a share – a significant premium to the company’s stock price at the time. The tweet initially caused Tesla’s stock price to skyrocket. But they sank when it quickly became clear that no such deal had been made.

Tesla executives rushed to explain the tweet to shareholders and regulators. Mr. Musk and Tesla later paid $ 20 million each to settle a Securities and Exchange Commission case on the matter, and he agreed to step down as chairman for three years.

Just after the onset of the crisis, JPMorgan wanted to reset the strike price in its contract. Ten days after Mr Musk’s tweet, the bank told Tesla it had reset the price to $ 424 a share. A week later, the bank raised the price slightly, to $ 484.35 per share.

Tesla did not respond to the changes until early 2019, when his lawyers wrote to JPMorgan, saying the bank’s strike price adjustments had been “unreasonably quick and represented an opportunistic attempt to capitalize on the changes in the volatility of Tesla’s shares “.

The two sides were still at an impasse in 2020 when Tesla’s five-to-one stock split prompted JPMorgan to adjust the strike price for a third time, bringing it down to $ 96.87.

Tesla never agreed to any of these changes. As of June of this year, Tesla paid JPMorgan only the “undisputed” part of the agreement between the two parties. (Tesla shares have traded above $ 600 for much of this month; the share was worth $ 1,013.39 a share at Monday’s close.)

“We have provided Tesla with multiple opportunities to fulfill its contractual obligations, so it is unfortunate that they forced this issue into litigation,” bank spokeswoman Tasha Pelio said, in an email to the New York Times.

Mr Musk and Ryan McCarthy, an attorney for Tesla, did not respond to messages seeking comment on Tuesday.

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Newsrust - US Top News: JPMorgan says Tesla owes him $ 162 million because of a tweet from Elon Musk.
JPMorgan says Tesla owes him $ 162 million because of a tweet from Elon Musk.
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