Tesla opposes JPMorgan because contract was affected by Elon Musk’s Tweet

Tesla opposes JPMorgan because contract was affected by Elon Musk's Tweet

Elon Musk’s tweets lead to a civil lawsuit by the US Securities and Exchange Commission (FILE)

New York:

Tesla Inc on Monday fought JPMorgan Chase & Co over a disputed bond contract, protesting the bank for seeking a “windfall” following CEO Elon Musk’s infamous 2018 tweet. that he could take his electric car company private.

In a court filing, Tesla accused JPMorgan of “lack of faith and greed” because it said it owed $162.2 million after unilaterally changing the terms of the security received when Tesla sold convertible bonds. in 2014.

By changing the terms, “JPMorgan has dealt with a pure shock on its own,” Tesla said in a counterclaim filed in Manhattan federal court.

“JPMorgan pressed its exorbitant request as an act of retaliation against Tesla because it ignored JPMorgan in major business transactions and did not sympathize with Mr. Musk by JPMorgan executives,” it added. .

A spokesman for the bank, Brian Marchiony, said in an email: “Their claim has no merit. This concerns the fulfillment of contractual obligations.”

The lawsuit has escalated a battle between the largest US bank and the world’s most valuable car company, which has had no business relationship since the disputed contract.

Warrants give the holder the right to buy stock in a company at a set price and “exercise” date.

In the November 15 lawsuit, JPMorgan said Musk’s August 7, 2018 tweet that he could choose Tesla was private and “funded secured”, and that his resignation dropped that plan 17 days later, created the stock price volatility to justify its strike price drop. guaranteed.

JPMorgan alleges Tesla defaulted for not delivering stock or cash when the warrants expire in June and July 2021, by which time Tesla’s stock price has increased tenfold.

In its rebuttal, Tesla accused JPMorgan of “thumbs-up” demanding more money, after it had received “multi-billion dollar payouts” due to soaring stock prices.

Musk’s tweets led to a civil lawsuit by the US Securities and Exchange Commission, which ended with a $20 million fine against both him and Tesla, and forced him to step down as chairman. Tesla.

Tesla’s lawsuit seeks unspecified damages.

(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)

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