New York — JPMorgan Chase & Co. and Tesla Inc. have mutually agreed to end their prolonged legal confrontation, dropping all claims against each other, a court filing revealed on Friday. This resolution puts an end to a contentious issue that began with a 2021 lawsuit filed by JPMorgan, linked to a 2014 agreement involving stock warrants and reiterated by an unexpected tweet from Tesla’s CEO, Elon Musk.
The financial dispute arose from Musk’s 2018 announcement on Twitter considering the privatization of Tesla at $420 per share, a declaration that he had the financing lined up to go through with the plan. This tweet significantly impacted Tesla’s stock volatility, prompting JPMorgan to adjust the strike price of the warrants—a move Tesla contested, arguing it was a manipulation to unfairly lower the strike price, hence breaching their contract.
JPMorgan, on its part, claimed the adjustment was a protective measure justified by the resultant fluctuations in Tesla’s stock value, asserting that it was entitled to $162 million either in shares or cash as per the original terms set to safeguard against possible stock dilution and to ensure certain tax benefits.
The dispute escalated over the years, culminating in a lawsuit and various legal exchanges until this recent withdrawal. The stipulations of any settlement that might have been agreed upon by the two giants have not been disclosed in the recent court documents, leaving the specifics of the resolution ambiguous.
The case saw significant legal proceedings in the Southern District of New York court, where, in September, U.S. District Judge Paul Gardephe denied JPMorgan’s motion for a pre-trial judgment that would have dismissed Tesla’s counterclaims, pushing the parties towards a showdown in court before this sudden reconciliation.
The decision to retract their claims not only closes this particular chapter but also averts what could have been a protracted and public legal battle. Neither representatives from Tesla nor JPMorgan have made any comments on the closure of their litigation.
Originally titled JPMorgan Chase Bank v. Tesla Inc., the case was a significant point of contention, reflecting the complex intersections of corporate agreements, market responses, and the power of social media influence in the financial markets.
As developments in corporate legal disputes continue to unfold, they bring to light the intricate nature of financial agreements and the unforeseeable complications that can emerge from seemingly straightforward arrangements.
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