JPMorgan withdraws lawsuit against Tesla regarding stock warrants

November 30, 2024 TruthUSA

The lawsuit against Tesla by JPMorgan Chase has been voluntarily dismissed, marking the end of a nearly three-year legal battle over stock warrants and Elon Musk’s tweet about taking Tesla private in 2018. The stipulation of dismissal was entered on Nov. 29 at the U.S. District Court for the Southern District of New York and signed by attorneys for both parties. The case is dismissed with prejudice, meaning JPMorgan cannot refile the lawsuit.

JPMorgan filed the lawsuit in 2021, accusing Tesla of breaching contractual obligations related to warrant transactions and seeking over $162 million in damages. The specific details of any settlement terms were not disclosed in the filing, leaving it unknown whether Tesla paid JPMorgan or if other resolutions were reached.

The disagreement originated from warrant transactions between JPMorgan and Tesla in 2014, where Tesla sold stock warrants to the bank. These warrants allowed JPMorgan to purchase Tesla stock at a set price if Tesla’s share price exceeded that price upon expiration. The issue arose in August 2018 when Musk’s tweet caused market turbulence, leading to a dispute over the value of the warrants.

Following this, Musk reversed the going-private plan, prompting JPMorgan to adjust the strike price again. Despite Tesla’s objections, JPMorgan argued it acted within the agreement terms and demanded shares or cash upon the warrants’ expiration in 2021.

Tesla’s refusal to comply led to JPMorgan’s lawsuit in November 2021, alleging Tesla ignored its payment obligation and seeking $162 million in damages. The case garnered attention due to Musk’s tweet and subsequent legal repercussions he faced, including settling fraud charges with the SEC in 2018.

Recently, Musk won a legal battle against Tesla investors, who claimed they suffered financial losses due to misleading tweets. Musk argued he had no malicious intent and believed funding was secured based on discussions with potential investors.

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