JPMorgan sues Tesla for US$162 million over unpaid warrants

Tesla abandoned the going-private deal on Aug 24, 2018. PHOTO: REUTERS

NEW YORK (BLOOMBERG) - JPMorgan Chase & Co has sued Tesla, seeking a US$162 million (S$219 million) payment for warrants that expired above their strike price, which had been muddied by founder Elon Musk's tweet in 2018 threatening to take the electric car company private.

JPMorgan claims the Aug 7, 2018 tweet amounted to a significant corporate transaction that allowed it to adjust the strike price, and the bank reduced it to maintain the same fair market value as before the announcement. Tesla abandoned the going-private deal on Aug 24 of that year, and JPMorgan again adjusted the strike price to reflect the increase in the share price.

"Even though JPMorgan's adjustments were appropriate and contractually required, Tesla has refused to settle at the contractual strike price and pay in full what it owes to JPMorgan," the bank said in a complaint filed on Monday in Manhattan federal court. "Tesla is in flagrant breach of its contractual obligations. As a result, more than US$162 million is immediately due and payable to JPMorgan by Tesla."

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