JPMorgan Chase sued Tesla for $162 million, alleging that the automaker failed to make a required payment that was triggered following chief executive Elon Musk’s 2018 announcement that he was considering taking the company private.
In a court filing, JPMorgan said that the warrants sold by Tesla had asked the bank to adjust its position after Musk said on Twitter that he had “secure capital” to acquire the company for $420. / shares.
When Tesla later announced that it had abandoned the transaction, the value of the warrants changed and JPMorgan was again obligated to change its position, the bank said in its complaint filed in a Manhattan court.
JPMorgan said the terms of the deal required it to be paid $162 million in cash or stock.
Tesla told JPMorgan that its adjustments were “unreasonably rapid and represented an opportunistic attempt to capitalize on changes in volatility in Tesla’s stock,” the lawsuit said.
The decision to sue a client of a major US bank is rare as they want to continue working with one of the largest US companies, but it also highlights that financial institutions can work with How complicated is Musk.
“While JPMorgan’s adjustments are appropriate and contractually required,” the lawsuit said, “Tesla flagrantly ignored its express contractual obligation to pay JPMorgan in full.”
In a statement, JPMorgan added: “We have provided Tesla with numerous opportunities to fulfill our contractual obligations, so it is regrettable that they have forced this matter into litigation.”
Tesla did not immediately respond to a request for comment.
The lawsuit is just the latest from Musk’s tweets, which shocked Wall Street with a terse message: “I’m considering buying my own Tesla for $420. Guaranteed funding. The tweet was posted after the Financial Times reported that Saudi Arabia’s sovereign wealth fund had purchased a $2 billion stake in the electric car maker.
After tweeting and reversing his privacy plans, Musk started a battle with the US Securities and Exchange Commission, charge him with securities fraud for misleading the market. Initially, Musk vehemently denied the allegations but finally bowed to the SEC and agreed to step down as chairman of Tesla and pay a $40 million fine.
