U.S. Lender JPMorgan Chase Drops Lawsuit Against Tesla
JPMorgan Chase has agreed to drop its lawsuit against Tesla, which was filed in 2021 and accused the electric vehicle maker of breaching a contract between the two companies in 2014. The move comes after the two companies filed a one-page court document announcing that they would drop their claims against each other.
Neither company disclosed the terms of the settlement, but JPMorgan stated that the two companies have decided to enter into a new commercial relationship and have settled their outstanding disputes.
The dispute stems from a 2014 contract between JPMorgan and Tesla related to stock warrants sold to the bank, which the bank believed became more valuable due to a 2018 tweet by Tesla CEO Elon Musk. JPMorgan alleged that Tesla breached the contract and sought $162.2 million in damages. Tesla, on the other hand, accused JPMorgan of seeking a “windfall” by repricing the warrants.
Musk’s 2018 tweet, in which he stated that he might take Tesla private at $420 per share and had “funding secured,” was cited by JPMorgan as a reason for the contract breach. The bank claimed that the tweet created significant volatility in the share price, forcing JPMorgan to reprice the warrants. Tesla countersued JPMorgan, alleging that the bank was seeking to profit from the fluctuating stock price.
The development marks an end to a contentious period between the two companies, which have agreed to put their differences aside and enter into a new commercial relationship.
