JPMorgan Chase & Co. has made the decision to end its lawsuit against Tesla Inc., which revolved around a breach of contract related to stock warrants dating back to 2014. The resolution of this legal dispute was recently disclosed through a court filing in Manhattan, revealing that both JPMorgan and Tesla have agreed to dismiss their respective claims against each other, as reported by Reuters.
The lawsuit initiated by JPMorgan in November 2021 sought a significant sum of $162.2 million, alleging that Tesla had breached the contract following a controversial post made by CEO Elon Musk in 2018. This post by Musk suggested the possibility of taking Tesla private at a price of $420 per share, leading to considerable stock price fluctuations that necessitated adjustments to the strike price of the warrants, according to JPMorgan's claims.
As a result of Musk's post causing stock price volatility and subsequent financial implications, JPMorgan argued that it had to reprice the warrants, but Tesla's failure to account for the stock price increase led to the bank filing the lawsuit. In response, Tesla counter-sued JPMorgan in January 2023, accusing the bank of seeking an unjust gain through the repricing process. The terms of the settlement between the two parties have not been publicly disclosed. The legal battle that commenced in 2021 concluded with this settlement, bringing an end to a closely watched dispute by both investors and industry observers.