JPMorgan files $162 million lawsuit against Tesla
JPMorgan Chase filed a lawsuit against Tesla Monday, accusing the electric car firm of "breach of contract action" over stock warrants following CEO Elon Musk's 2018 tweet that he might take his firm private.
Why it matters: JPMorgan alleges the bank and Tesla "entered a series of warrant transactions, which required Tesla to deliver either shares of its stocks or cash to JPMorgan" if the car company's share price was above the contractual "strike price" when the warrants expired.
- The warrants "substantially decreased" in value after Musk tweeted that Tesla had "funding secured" to take Tesla private at $420.
- They expired in June and July of this year "with Tesla's share price above that strike price," JPMorgan alleges.
Of note: "JPMorgan demanded the due shares or cash, but Tesla has flagrantly ignored its clear contractual obligation to pay JPMorgan in full," the bank said in the suit, filed in the U.S. District Court in Manhattan.
- "JPMorgan brings this action to enforce its right to payment."
- JP Morgan said in the suit that it's seeking to recover "over $162 million immediately due and payable."
What they're saying: JPMorgan spokesperson Tasha Pelio said in an emailed statement that the bank had given "Tesla multiple opportunities to fulfill its contractual obligations, so it is unfortunate that they have forced this issue into litigation."
- Representatives for Tesla did not immediately respond to Axios' request for comment.
Read the lawsuit in full, via DocumentCloud:
Editor's note: This article has been updated with comment from Pelio.