Elon Musk’s tweet prompts JPMorgan to sue Tesla for $ 162 million

Musk’s tweet on August 7, 2018, saying he could take Tesla out of the stock market by paying $ 420 a share and that he had “secured funding,” and his subsequent announcement 17 days after he abandoned the plan, created a significant volatility in the share pricesaid the bank.

On both occasions, JPMorgan adjusted the share price “to maintain the same fair market value” as before the tweets.

Tesla’s stock price increased roughly 10-fold by the time the warrants expired this year, and JPMorgan said this required Tesla, under its contract, to deliver stocks or cash.

The bank said that Tesla’s failure to do so amounted to a default.

“Although JPMorgan’s adjustments were appropriate and contractually required,” the complaint said, “Tesla has flagrantly ignored its clear contractual obligation to pay JPMorgan in full,” the bank said.

Tesla in February 2019 complained that the bank’s adjustments were “an opportunistic attempt to take advantage of changes in the volatility of Tesla shares,” but did not contest the underlying calculations, JPMorgan said.

Musk’s tweets prompted the U.S. Securities and Exchange Commission (SEC) to file civil charges and set fines of $ 20 million against both him and Tesla.

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