JPMorgan Settles Lawsuit Against Tesla Over Musk's 2018 Tweet - Report

According to Bloomberg News, JPMorgan Chase (NYSE:JPM) & Co. has concluded its legal dispute with Tesla Inc., with both parties agreeing to drop their respective claims.

The disagreement, which began with JPMorgan filing a lawsuit in 2021, revolved around a stock warrant transaction from 2014 and was connected to a tweet by Tesla CEO Elon Musk. The bank had claimed $162 million from Tesla based on the terms of the agreement, asserting that this amount should be paid either in stock or cash. This agreement was intended to protect Tesla from potential dilution of shares arising from convertible bonds and to secure specific tax benefits.

The dispute escalated after Musk's tweet in August 2018, in which he claimed to be considering taking Tesla private at $420 per share and that “funding was secured.” JPMorgan indicated that it adjusted the warrants' exercise price in response to this tweet and contended that it had the right to do so due to increased volatility in Tesla's stock.

Tesla countered by accusing JPMorgan of manipulating the situation, unfairly lowering the exercise price, breaching the contract, and attempting to gain unjust financial advantage.

The decision to mutually withdraw the lawsuits was announced through a brief document filed with the court on Friday, with details of any potential settlement not disclosed in the filing.

This resolution of the legal matter follows a ruling made by U.S. District Judge Paul Gardephe in September, who denied JPMorgan's request for a pre-trial ruling in its favor and rejected Tesla's counterclaims.

Representatives and legal teams from both Tesla and JPMorgan did not comment on the latest developments in the case. The lawsuit, known as JPMorgan Chase Bank v. Tesla Inc., was being heard in the U.S. District Court for the Southern District of New York.