NEW YORK: JPMorgan Chase & Co on Monday sued Tesla Inc for $162.2 million, accusing Elon Musk’s electric car company of breaching a contract related to stock warrants following Musk’s 2018 tweet that he might take Tesla private.
According to a complaint filed in Manhattan federal court, Tesla entered warrant transactions that required it to deliver shares of its stock or cash if its share price was above the contractual “strike price” when the warrants expired.
The largest U.S. bank said the warrants lost substantial value after Musk’s Aug. 7, 2018 tweet that Tesla had “funding secured” to go private at $420 per share, and remained well below Tesla’s share price upon expiring in June and July 2021.
“JPMorgan demanded the due shares or cash, but Tesla has flagrantly ignored its clear contractual obligation to pay JPMorgan in full,” the complaint said. “JPMorgan brings this action to enforce its right to payment.”
Tesla did not immediately respond to a request for comment after market hours.
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