Tesla is being sued by JP Morgan for $162 million over previous comments from the founder about taking the company public. Meanwhile, Elon Musk has sold another block of shares worth around $1 billion.
JP Morgan is suing Tesla for $162m over claims that the EV maker “flagrantly” breached a contract related to share warrants. The bank said it had purchased warrants from Tesla in 2014 that were due to expire this summer.
Tesla’s shares have soared since 2014, however, Tesla allegedly failed to honour part of the deal amid a dispute over JP Morgan adjusting its terms when Musk attempted to take the company private. Musk had said he had funding to take Tesla private at $420 a share, which would have hurt JP Morgan’s warrants, which had a $560.64 a share strike price.
Elon Musk has also sold another block of shares worth $930 million, which brings his sales to $7.8bn of Tesla in recent days. Analyst Michael Burry, of “The Big Short” fame, said that Musk did not need the money and was using recent tax comments as an excuse to sell out of Tesla at these prices.
Tesla shares have made a quick retracement of the recent gains above $1,200 with a move to test the $1,000 level twice on the daily chart. That could prove to be support for the price here and there is also the moving average below at $900 which also aligns with a previous 2021 high. TSLA would appear to have strong support for the near-term after this correction.
This post was last modified on Nov 16, 2021, 15:09 GMT 15:09