JPMorgan Sues Tesla for $162.2 Million Over Breach of Contract
It appears that Elon Musk’s inflamed twitter finger was at it again, except this time to the tune of a $162.2 million lawsuit.
JPMorgan Chase filed a $162.2 million lawsuit against Tesla (NASDAQ: TSLA) on Monday in Manhattan federal court, accusing the EV company of breaching a contract regarding stock warrants. According to the complaint, which was seen by Reuters, Tesla entered warrant transactions that came with an obligation to either hand over shares of its stock or cash in the event the stock price rose above the strike price upon their expiry.
However, JPMorgan alleges that the warrants suffered a significant loss in value, after a tweet on August 2018 by CEO Musk teased that Tesla had secured funding to go private at a price of $420 per share. When the warrants expired in June and July 2021, they were substantially below the EV company’s share price.
Thus far, Tesla has failed to meet the contract’s obligations, and as such, the US bank is demanding that the company deliver the due shares or cash, and has filed the suit to “enforce its right to payment.”
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.