JP Morgan Sues Tesla For $162.2 Mln For Warrant Breach

(RTTNews) - JP Morgan Chase (JPM) has filed a lawsuit against EV giant Tesla Inc (TSLA) for $162.2 million for breach of warrants sold to JPM by Tesla back in 2014.

According to the filing, the banking company had to reprice the warrants it bought from Tesla when Musk tweeted going back to private back in 2018.

"We have provided Tesla multiple opportunities to fulfill its contractual obligations, so it is unfortunate that they have forced this issue into litigation," said a spokesperson for JPMorgan.

According to the warrant, Tesla was contractually obligated to deliver shares or cash if its shares were higher than a set "strike price" in July 2021. But Elon Musk's whimsical call to make Tesla private for $420 a share in 2018 forced JPMorgan to make changes to the warrant.

Tesla accused JPMorgan of being "unreasonably swift and represented an opportunistic attempt to take advantage of changes in volatility in Tesla's stock." But Tesla did not go on to challenge the calculations provided by the bank.

The suit claims, "In total, Tesla failed to deliver 228,775 shares of its common stock, leaving JPMorgan with an open hedge position equal to that shortfall."

In the meantime, Tesla stock dropped to $177 in 2019 before surging up to the current price of $1013. But Musk's company has failed to pay the bank it's due.