JPMorgan Chase has agreed to drop its long-running lawsuit against Tesla, resolving a legal dispute over stock warrants that dated back to a 2014 agreement between the two companies. The settlement was confirmed on Friday through a brief filing in a Manhattan court, where both companies stated that they would dismiss all claims against each other.
The dispute centered on Tesla’s alleged breach of a contract related to stock warrants sold to JPMorgan in 2014. The bank claimed that the electric vehicle maker’s actions—particularly a 2018 tweet by Tesla CEO Elon Musk—had dramatically increased the value of the warrants, forcing JPMorgan to adjust their strike price. According to JPMorgan, this adjustment resulted in a substantial financial obligation from Tesla, which the company failed to fulfill.
In a statement issued on Saturday, JPMorgan confirmed the settlement and indicated that both parties would enter into a new commercial relationship. “JPMorgan and Tesla have decided to enter into a new commercial relationship and settle the outstanding disputes between the companies,” said a spokesperson. “This is a good outcome for all, and we look forward to working together.”
The legal battle began in November 2021 when JPMorgan sued Tesla for $162.2 million, alleging that the company’s stock price volatility, caused in part by Musk’s famous August 2018 tweet about potentially taking Tesla private, violated the terms of their agreement. Musk’s tweet, which indicated he had “funding secured” to take Tesla private at $420 per share, caused significant fluctuations in the stock price. As a result, JPMorgan argued that it was forced to reprice the warrants in accordance with the terms of the agreement, which Tesla subsequently failed to pay for.
In retaliation, Tesla countersued JPMorgan in January 2023, accusing the bank of attempting to capitalize on the situation and seeking a “windfall” through the repricing of the warrants.
Though the terms of the settlement remain undisclosed, both parties have agreed to move forward without further litigation. Tesla did not respond to media requests for comment on the resolution.
This settlement marks the end of a legal saga that not only touched on the high-stakes world of stock options and executive tweets but also highlighted the ongoing tensions between major financial institutions and the tech sector.
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