Tesla takes on JP Morgan in battle over warrant

JPMorgan began the fight in November with a lawsuit, claiming it owed nearly $162 million more for a set of warrants it had acquired as part of the bond sale. Tesla said on Monday that the bank was not entitled to the billions of dollars in stock it received last year from those warrants.

The dispute is raising curtains on the bad relationship between the country’s largest bank and the world’s most valuable auto maker. JPMorgan has been slammed by Tesla over business deals and executives at the companies have clashed, including chief executive Jamie Dimon and Elon Musk, The Wall Street Journal reports.

Tesla claims that the feud is actually behind JPMorgan’s lawsuit. It alleged that the bank’s action was “bad faith and greed”.

Tesla alleged, “JPM as an act of retaliation against Tesla by pressuring its excessive demand to pursue JPM in major business deals and JPM’s senior executives’ opposition to Mr. Musk,” Tesla alleged. Put it.

Mr Musk said he would write a one-star review on Yelp if the bank did not withdraw the lawsuit.

JPMorgan said on Monday that there was no merit in its claim. It comes down to meeting contractual obligations.”

The controversy centers on one of Mr Musk’s more turbulent episodes, when he messed with taking Tesla private in 2018. He was later forced to step down as chairman in a settlement with the Securities and Exchange Commission over his tweets about it.

In 2014, JPMorgan acquired warrants from Tesla as part of a convertible bond sale working for the auto maker along with other banks. The warrant allowed banks to acquire stock in Tesla at a set price when it expires in June and July 2021.

JPMorgan has claimed that Mr Musk influenced the value of the warrant when he tweeted in 2018 that he had the funds to take Tesla private. The bank used his tweets as a justification for lowering the strike price of the warrant, which could give it more leverage if Tesla’s stock rises.

Last summer, Tesla paid based on the original price but declined to accept JPMorgan’s change. Tesla said on Monday that the bank had received billions of dollars in stock.

Tesla said on Monday that JPMorgan had no right to make changes and demand more money, as it said the bank didn’t really believe Mr Musk would take Tesla private. It said Mr Musk’s tweets did not affect the price and that none of the other banks made changes.

Tesla said the bank broke the contract and should have canceled the warrant and returned it instead. The lawsuit is seeking unspecified damages and charges from the bank.

This story has been published without modification to the text from a wire agency feed