Elon Musk Tweet Got Tesla Sued by JPMorgan
There’s certainly no shortage of controversy surrounding the tweets of Tesla CEO Elon Musk. His Twitter feed is packed full of questionable takes, memes, and general nonsense. Effectively, just like most Twitter feeds. However, his tweets carry a bit more weight to them than most. While he’s largely been in the news as of late due to his massive investment and subsequent purchase of Twitter, there are plenty of other situations surrounding Musk at the moment. Included in that list, believe it or not, is one of his Tweets causing JPMorgan to sue Tesla.
Elon’s tweet about taking Tesla private caused stock fluctuations that JPMorgan is unhappy about
According to Reuters, JPMorgan is suing Tesla for $162.2 million because of a breach in contract with stock warrants that JPMorgan purchased from Tesla in 2014. Warrants allow holders the right to buy a company’s stock at a set price and date.
However, JPMorgan argues that Elon Musk’s 2018 tweet in which he suggested potentially taking Tesla off the market and becoming a private company caused the price of the warrants to spike. The bank suggests that the ten-fold increase in Tesla stock prices obligated it to adjust the prices of the warrants. Therefore, the claim is that Tesla should have to pay out the $162.2 million difference from the adjusted price.
However, the judge assigned to this case isn’t so sure it’s that clear. Judge Paul Gardephe says he is unlikely to rule for JPMorgan without more evidence from financial experts. He wants a professional opinion about whether the bank acted in good faith.
“Expert testimony regarding the custom in the industry appears necessary,” said Gardephe.
On the contrary, Tesla believes that the bank is far from acting in good faith. So much so that the EV giant countersued JPMorgan, declaring that the bank was only after a “windfall” resulting from the warrant price adjustment. Effectively, that all means that Tesla believes the bank is trying to take advantage of the situation to benefit its own greater good unjustly.
The statement was not by Tesla but by an individual
As of now, the smoking gun for ruling in favor of Tesla seems to be the nature of the tweet itself. Judge Gardephe says the fact that the tweet was made solely by Elon Musk as an individual and not officially on behalf of Tesla means that the company is free and clear of any wrongdoing.
On the contrary, Elon Musk was held financially responsible in the past when it comes to tweets. Between himself and Tesla, U.S. Securities and Exchange Commission has collected over $20 million in fines for Musk’s tweets.
Tesla lawyer Jonathan Pickhardt says that the judge refuses to make a quick ruling. That is until he has more information from financial experts. So, there’s a good chance this could be a long and slow court battle.
Ultimately, this seems like one of those big corporation semantics battles that will continue to dwell in court. As the past has shown, though, it seems Elon Musk isn’t too afraid of being slapped with fines. What’s a few million dollars to the richest person on the planet?