It might cost more than $150 million for Musk to be in hot water again.
According to The Guardian, JPMorgan Chase has filed a $162 million lawsuit against the company for breaching a contract regarding stock options. Musk made a big deal about taking the company private when his shares hit $420. The bank says the tweet cost it millions in potential profit from its options.
A spokesman for JPMorgan said that it was unfortunate that they had forced the issue into litigation, because they had provided multiple opportunities to fulfill their contractual obligations.
Money was wasted.
The entire suit is complex, but we will try to explain.
The issue is due to the options held by JPMorgan. If the car company's shares were worth more than $560 when the options expired in June and July of 2021, the bank would owe them the difference between the share price and the strike price.
Considering that the stock was worth more than $600 by the end of June, the bank was expecting to make a profit. The bank wouldn't be able to hit $560 since Musk said he would take the company private at $420. The strike price had to be moved to compensate.
The bank wants the extra $162 million because it moved its strike price down, but it hasn't been paid yet.
The situation shows how much of an albatross around Musk's neck it was. You would think that he would have learned his lesson by now, but he is still shooting himself in the foot.
The Guardian reported on a lawsuit that was filed by JPMorgan after Musk soured a share deal.
Musk is beefing with another electric carmaker again.
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