Tesla countersues JPMorgan over warrants dispute

• Tesla accused JPMorgan of “bad faith and avarice” for demanding $162.2 million

• In 2014, Tesla sold warrants to JPMorgan that would expire in June and July 2021

Tesla Inc (NYSE: TSLA) on Monday countersued JPMorgan Chase & Co (NYSE: JPM) over warrants sold by the electric vehicle company to the bank in 2014.

Tesla, in a filing in Manhattan federal court, accused JPMorgan of “bad faith and avarice” for demanding $162.2 million after the expiration of warrants last year.

"JPMorgan pressed its exorbitant demand as an act of retaliation against Tesla both for it having passed over JPMorgan in major business deals and out of senior JPMorgan executives' animus toward Mr. Musk," Tesla said.

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In 2014, Tesla sold warrants to JPMorgan that would expire in June and July 2021. The holders of warrants have the right to buy company stock at “strike” price.

JPMorgan in its November lawsuit said that Tesla warrants had provisions allowing to adjust the “strike” price against economic effects.

In 2018, Musk tweeted that he plans to take Tesla private and had “funding secured,” which he later reversed. JPMorgan said that this incident accounts for such effects.

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U.S. Securities and Exchange Commission fined both Musk and Tesla $20 million for the tweet.

JPMorgan accused Tesla of defaulting as it was unable to hand over shares upon expiration of warrants.

Picture Credits: Reuters