(Reuters) – U.S. lender JPMorgan Chase agreed on Friday to drop its lawsuit against Tesla that accused the electric car maker of “inexplicably” breaching an agreement between the two companies in 2014 related to warrants sold to the bank by Tesla.
The decision to remove this court was announced in the same court by the two companies in the Manhattan court, where they said they will throw away their documents.
Bloomberg News reported the initial settlement on Friday.
Neither company has released terms of the settlement, according to court filings.
JPMorgan and Tesla did not immediately respond to Reuters requests for comment.
JPMorgan sued Tesla in November 2021, seeking $162,000, saying Tesla breached a 2014 agreement related to stock warrants it sold to the bank, which the bank believes increased in value due to a 2018 tweet by Tesla CEO Elon Musk.
Warrants give the owner the right to buy the company’s stock at a specified “strike” price and date.
Musk’s Aug. 7, 2018 tweet that he might take Tesla private at $420 per share and he had “funds saved,” and his announcement 17 days later that he was leaving the plan, caused significant volatility in the share price, the bank said. In both cases, JPMorgan adjusted the strike price “to maintain a fair market price” as before the tweets, the bank said.
JPMorgan said it was obligated to restore the warrants after Musk’s tweet, and that a 10-fold increase in Tesla’s sales price required the company to pay, which it had not done.
Tesla sued JPMorgan in January 2023, accusing the bank of seeking “wind” when it returned the warrants.
Musk, who bought Twitter for 44 billion dollars in 2022, agreed in a 2018 agreement with the US Securities and Exchange Commission to get pre-approval from Tesla’s lawyer for some tweets.
(Reporting by Gnaneshwar Rajan in Bengaluru; Editing by Muralikumar Anantharaman)