(Reuters) – U.S. lender JPMorgan Chase agreed on Friday to drop its lawsuit against Tesla that accused the electric vehicle maker of “flagrantly” violating a contract between the two companies in 2014 related to warrants Tesla sold to the bank.
The decision to withdraw the lawsuit was announced in a one-page court filing filed by both companies in a Manhattan court, where they said they would withdraw their mutual claims.
Bloomberg News reported on the deal earlier on Friday.
Neither company disclosed the terms of the agreement, according to court documents.
JPMorgan and Tesla did not immediately respond to Reuters requests for comment.
JPMorgan sued Tesla in November 2021, seeking $162.2 million, alleging that Tesla breached a 2014 contract related to stock warrants it sold to the bank, which the bank believes became more valuable because of a tweet by Tesla. 2018 by Tesla CEO Elon Musk.
Warrants give the holder the right to purchase shares of a company at a set price and “exercise” date.
Musk’s August 7, 2018 tweet that he could take Tesla private at $420 per share and have “funding secured,” and his subsequent announcement 17 days after he was abandoning the plan, created significant price volatility. of the shares, the bank said. On both occasions, JPMorgan adjusted the strike price “to maintain the same fair market value” as before the tweets, the bank said.
JPMorgan said it was required to change the price of the warrants after Musk’s tweet, and that a subsequent 10-fold increase in Tesla’s share price required that company to make payments, which it had not done.
Tesla countersued JPMorgan in January 2023, accusing the bank of seeking a “windfall” when it repriced the warrants.
Musk, who bought Twitter for $44 billion in 2022, agreed in a 2018 settlement with the U.S. Securities and Exchange Commission to get prior approval from a Tesla lawyer for some tweets.
(Reporting by Gnaneshwar Rajan in Bengaluru; Editing by Muralikumar Anantharaman)