Tesla CEO Elon Musk isn’t necessarily known for getting along with people, and a feud between Musk and JPMorgan Chase’s CEO Jamie Dimon that has lasted for years has recently surfaced with some choice words on the internet.
The Wall Street Journal reported on Monday that JPMorgan has lodged a lawsuit against Tesla, saying that the automaker owes them $162 million USD from a trade originally made in 2014, according to sources aware of the subject matter.
“At the heart of the lawsuit are warrants that JPMorgan bought from Tesla as part of a large set of trades it helped set up for the company in 2014. Tesla would have to pay JPMorgan, in cash or stock, if the stock was trading above the agreed-upon price when the warrants expired in 2021,” reports the WSJ.
What is a stock warrant? It allows the right to purchase a company’s stock at a particular price at a specific date. The guaranteed price to buy is known as the strike price.
But when Musk tweeted in 2018 “funding secured” to take Tesla private, the investment bank lowered its strike price, assuming a deal was coming. But when the deal wasn’t coming, JPMorgan increased its strike price but not back up to the original price.
Tesla responded to the lawsuit and the price adjustments by saying they were “unreasonably swift” and “opportunistic”.
While Dimon and Musk have tried to smooth things over in the past, according to the sources, the opposite took place in an exchange about the lawsuit between Musk’s Tesla and JPMorgan online, in a move uncommon for high-profile banks.
Elon Musk’s Management Style Revealed in Emails to Tesla Employees https://t.co/zUo6xAK5gj
— TeslaNorth.com (@RealTeslaNorth) November 22, 2021
Last week, JPMorgan said, “We have provided Tesla multiple opportunities to fulfill its contractual obligations, so it is unfortunate that they have forced this issue into litigation.”
In response, Musk half-jokingly (or likely serious) fired back, “If JPM doesn’t withdraw their lawsuit, I will give them a one-star review on Yelp.” Musk continued, “This is my final warning!”
As per public records, JPMorgan’s investment bankers haven’t done any work with Tesla since 2016, after supporting the company’s initial public offering (IPO) of stock in 2010 – though the bank was reportedly skeptical about backing Tesla and electric vehicles (EVs) in general, sources say.