JPMORGAN has sued Tesla, claiming that the electric car agency owes the bank $162 million related to a 2014 stock warrant agreement. The dispute centers around adjustments the agencies made to the agreement following Tesla CEO ELON MUSK’S 2018 “funding secured” tweeted and the resulting fallout.
The lawsuit was filed late Monday in the southern district of NEW YORK. Tesla did not immediately respond to a request for comment, and has disbanded its US press team.
According to the suit, which was first reported by Reuters, JPMORGAN purchased a number of warrants from Tesla in 2014 back when agency was still trying to fund the construction of the original GIGAFACTORY.
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Stock warrants give the buyer a right to purchase shares in an agency at a set price within a certain window of time. The warrants JP MORGAN bought from Tesla in 2014 were set to expire in June and July of 2021.
JP MORGAN says Tesla still owed 228,775 shares when it terminated the deal, and that those shares are worth $162,216,628.81 based on Tesla stock price at the time. Potentially worse for JP MORGAN, it had hedged its warrant agreement with Tesla by maintaining a short position against Tesla stock. When Tesla didn’t settle the remaining shares, the bank had to buy the same amount on the open market to cover that hedged bet.