US Lender JPMorgan Chase Drops Lawsuit Against Tesla
US Lender JPMorgan Chase agreed on Friday (Nov 29) to drop its lawsuit against Tesla that accused the electric vehicle maker of “flagrantly” breaching a contract between the two companies in 2014 relating to warrants Tesla sold to the bank.
Settlement Terms Not Disclosed
The move to drop the lawsuit was announced in a one-page court filing by both companies in a Manhattan court, where they said they will drop their claims against each other.
Bloomberg News reported the settlement earlier on Friday.
Neither company disclosed settlement terms, according to the court filings.
Background of the Dispute
JPMorgan sued Tesla in November 2021, seeking US$162.2 million, alleging that Tesla breached a 2014 contract related to stock warrants it sold to the bank, and which the bank believes became more valuable because of a 2018 tweet by Tesla CEO Elon Musk.
Warrants give the holder the right to buy a company’s stock at a set “strike” price and date.
Musk’s Aug 7, 2018 tweet that he might take Tesla private at US$420 per share and had “funding secured,” and his subsequent announcement 17 days later that he was abandoning the plan, created significant volatility in the share price, the bank said. On both occasions, JPMorgan adjusted the strike price “to maintain the same fair market value” as prior to the tweets, the bank said.
Counterclaim by Tesla
Tesla countersued JPMorgan in January 2023, accusing the bank of seeking a “windfall” when it repriced the warrants.
Conclusion
The settlement between JPMorgan Chase and Tesla brings an end to a long-standing dispute between the two companies. The exact terms of the settlement remain undisclosed, but the move is seen as a positive development for both parties.
FAQs
Q: What was the dispute between JPMorgan Chase and Tesla about?
A: The dispute was about a 2014 contract related to stock warrants that Tesla sold to JPMorgan Chase, which the bank believes became more valuable due to a 2018 tweet by Tesla CEO Elon Musk.
Q: What was the amount JPMorgan Chase was seeking in the lawsuit?
A: JPMorgan Chase was seeking US$162.2 million in the lawsuit.
Q: What was the outcome of the dispute?
A: The dispute was settled, with both parties agreeing to drop their claims against each other. The exact terms of the settlement remain undisclosed.
