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Elon Musk’s tweets have Tesla Inc. in trouble again.

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JPMorgan Chase & Co. JPM, -0.18% on Monday sued Tesla TSLA, -1.94%, seeking to recover $162.2 million and accusing the electric-vehicle company of breach of contract over warrant transactions that JPMorgan claims Tesla never paid.

A filing in Manhattan federal court dated Monday detailed a years-long dispute, and claimed “Tesla has flagrantly ignored its clear contractual obligation to pay JPMorgan in full.”

The case centers around a series of warrant transactions from February and March 2018 that required Tesla to deliver to the investment bank either shares of its stock or cash if Tesla shares’ “strike price” were above an agreed-upon amount when the warrants expired.

JPMorgan claims the warrants lost significant value after CEO Musk tweeted in August 2018 that Tesla had “funding secured” to go private at $420 a share, and that the ensuing volatility weighed on the stock’s price until the warrants expired in June and July 2021 — with the share price well above both the original and strike prices.

JPMorgan said adjustments reducing the strike price were made after Musk’s 2018 tweet, and again after Tesla’s 5-for-1 stock split in 2020, but “Tesla has refused to settle at the contractual strike price.”

According to the lawsuit, Tesla claimed in 2019 that JPMorgan’s adjustments were “an opportunistic attempt to take advantage of changes in volatility in Tesla’s stock.”

Tesla, which dissolved its media-relations team last year, did not immediately respond to a request for comment Monday.

Musk and Tesla were each fined $20 million by the Securities and Exchanges Commission to settle fraud charges over the tweet, Musk was removed as the company’s chairman and Tesla agreed to preapprove his tweets (which the SEC said earlier this year Tesla had failed to do).

Tesla shares were in the $50-$60 range in February and March 2018, and were between $600 and $700 by June and July 2021. Since the summer, Tesla stock has spiked another 41%, closing at $1,003 on Monday.

Source: MW

Dompreh Joshua Kojo, the founder and manager for Celebritieshitz News. My vision is to make information easy and accessible for everyone by giving them accurate and update to date information. Contact: +233 59 306 8471

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