Investment banking giant JPMorgan Chase has filed a $162.2 million lawsuit against Tesla and its founder, Elon Musk, for breach of contract. According to the complaint filed in Manhattan federal court, Tesla sold stock warrants to JPMorgan that would pay off if their “strike price” didn’t exceed Tesla’s share price when they expired in mid-2021. But Musk blew it all up with one tweet in August 2018 proposing he take Tesla’s stock private at $420 per share—a reference to pot-smoking culture—as he had “funding secured,” though he walked back the claim just 17 days later. JPMorgan said it had to heavily reduce its strike price as a result, but Tesla’s share still skyrocketed 10-fold by the time the warrants expired. Tesla then “flagrantly ignored” a contract by failing to deliver shares of its stock or cash, the lawsuit alleges.
The infamous 420 tweet also prompted the U.S. Securities and Exchange Commission to file civil charges, and fine Musk and Tesla $20 million.
Read it at CNN Business
