[ad_1]
Elon Musk’s Twitter post about keeping Tesla private more than three years later still following him.
On Monday, JPMorgan Chase sued Tesla in federal court, demanding $162 million the bank says the electric car maker owes under a stock options contract the companies signed in 2014. At the heart of the dispute is JPMorgan’s change of details after any “extraordinary event” at Tesla.
The bank has moved into the bill because an August 7, 2018 tweet from Tesla’s CEO, Mr. Musk, in which he said he “has the finance” to buy Telsa at $420 per share, significantly lowered Tesla’s share price. He claims to be asleep. . Tesla’s leaders disagree.
JPMorgan’s lawsuit says that Tesla sold JPMorgan stock guarantees “as part of a larger capital markets transaction” in 2014. Under the deal, if Tesla’s stock was at or above a certain price on the day the options expire after seven years, it would have to pay JPMorgan a certain amount of money—the difference between the actual share price at that time and the actual share price on that date. – called the “strike price” determined by the two parties.
The strike price was initially set at just over $560 per share. Then came Mr. Musk’s tweet about the deal to buy Tesla at $420 per share – a substantial premium over the company’s stock price. The tweet initially boosted Tesla’s share prices. But when it quickly became clear that no such agreement had been reached, they went bankrupt.
Tesla executives tried to explain the tweet to shareholders and regulators. Mr Musk and Tesla later paid $20 million each settled a Securities and Exchange Commission case on the matter and agreed to step down as chairman for a three-year term.
Right after the crisis began, JPMorgan wanted to reset the strike price on its contract. Ten days after Mr. Musk’s tweet, the bank told Tesla it had reset the price to $424 per share. A week later, the bank raised the price slightly to $484.35 per share.
Tesla did not respond to the changes until early 2019, when his lawyers told JPMorgan that the bank’s strike price adjustments were “reasonably rapid and represent an opportunistic attempt by Tesla to take advantage of changes in stock volatility.”
The two sides were still at a stalemate in 2020, when Tesla’s five-to-one stock split prompted JPMorgan to adjust the strike price for the third time and lower it to $96.87.
Tesla never accepted any of these changes. Beginning in June of this year, Tesla paid JPMorgan only the “controversial” part of the two parties’ agreement. (Tesla shares traded more than $600 for most of that month; the stock was at $1,013.39 per share at Monday’s close.)
“We’ve provided Tesla many opportunities to meet its contractual obligations, so it’s unfortunate that they’re pushing this issue to litigation,” bank spokesperson Tasha Pelio said in an email to The New York Times.
Tesla’s lawyers, Mr Musk and Ryan McCarthy, did not respond to messages seeking comment on Tuesday.
[ad_2]
Source link