Investor's Corner
Tesla sued by JPMorgan over Musk’s 2018 ‘funding secured’ Tweet
Tesla is being sued by JP Morgan Chase in a massive $162 million lawsuit over stock warrants linked to CEO Elon Musk’s infamous “funding secured” Tweet from 2018 when Musk hinted toward taking the company private at $420.
Court filings made public on Monday and reported by Barron’s showed JPMorgan Chase is alleging Tesla of branching a contract in regards to the repricing of warrants. Following Musk’s Tweet in 2018 that hinted he was thinking of taking Tesla private at $420 per share, the stock responded with volatility, which caused losses. JPMorgan Chase’s lawsuit outlines a potential payout of $162.2 million, plus interest, fees, and expenses.
JPMorgan filed the complaint in the Southern District of New York, and details a contract with Tesla where the automaker was legally obliged to deliver shares or cash if the stock price passed certain levels by a certain time. This is known as a “strike price.” Barron’s said this was a stock warrant transaction, which is similar to stock options contracts available to retail investors.
The lawsuit’s most critical point is that Tesla did not deliver the cash or shares. JPMorgan was forced to reprice the stock warrants after Musk Tweeted, “Am considering taking Tesla private at $420. Funding secured. Shareholders could either to sell at 420 or hold shares & go private.”
Shareholders could either to sell at 420 or hold shares & go private
— Elon Musk (@elonmusk) August 7, 2018
Musk’s Tweet resulted in a settlement with the SEC, which required the CEO to step down as Tesla’s Chairman, pay a $20 million penalty, appoint two new independent directors to the Tesla board, and “establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications.”
The Tweets spiked Tesla’s stock price, which, in turn, caused JPMorgan to readjust the value of the warrants. After Musk and Tesla confirmed a few weeks later that the stock would not be taken private, JPMorgan readjusted the value of the warrants once again. Tesla sold warrants to JPMorgan with provisions that protected both entities from potential volatility that could come from significant corporate transactions, according to JPMorgan. The provisions gave the banking firm the right to adjust and readjust the warrants in cases of significant announcements that could cause stock movement. JPMorgan said the provisions were put in to protect both parties from “exactly the type” of announcement that Musk Tweeted.
Tesla, however, did not take kindly to JPMorgan repricing the warrants and stated that the bank’s move was “unreasonably swift and represented an opportunistic attempt to take advantage of changes in volatility in Tesla’s stock,” according to a letter that was included in the filing.
Credit: Tobias Lindh/Youtube
JPMorgan did not readjust the strike price following the second modification, the filing said, as the warrants expired in June and July 2021. Tesla’s stock rose nearly 900% from the 2018 Tweet to the end of July 2021, most of the growth taking place during 2020, when TSLA shares rose over 700%. The prices were above the original and readjusted strike prices.
The lawsuit said that Tesla and the bank have agreed that the automaker should settle the undisputed number of shares earlier in 2021. However, Tesla is still uneasy with the fact JPMorgan readjusted the strike prices, but JPMorgan said that failure to settle the adjusted strike price could conclude with a default. JPMorgan’s suit said Tesla failed to deliver 228,775 shares, meaning the bank is stuck with an open hedge position that equals the shortfall. “Even though JPMorgan’s adjustments were appropriate and contractually required, Tesla has refused to settle at the contractual strike price and pay in full what it owes to JPMorgan,” the firm said in its complaint. “As a result, more than $162 million is immediately due and payable to JPMorgan by Tesla.”
The case, JPMorgan Chase Bank v. Tesla Inc., 21-cv-09441, is available to read here.
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Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Investor's Corner
Tesla receives major institutional boost with Nomura’s rising stake
The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Tesla (NASDAQ:TSLA) has gained fresh institutional support, with Nomura Asset Management expanding its position in the automaker.
Nomura boosted its Tesla holdings by 4.2%, adding 47,674 shares and bringing its total position to more than 1.17 million shares valued at roughly $373.6 million. The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Institutional investors and TSLA
Nomura’s filing was released alongside several other fund updates. Brighton Jones LLC boosted its holdings by 11.8%, as noted in a MarketBeat report, and Revolve Wealth Partners lifted its TSLA position by 21.2%. Bison Wealth increased its Tesla stake by 52.2%, AMG National Trust Bank increased its position in shares of Tesla by 11.8%, and FAS Wealth Partners increased its TSLA holdings by 22.1%. About 66% of all outstanding Tesla shares are now owned by institutional investors.
The buying comes shortly after Tesla reported better-than-expected quarterly earnings, posting $0.50 per share compared with the $0.48 consensus. Revenue reached $28.10 billion, topping Wall Street’s $24.98 billion estimate. Despite the earnings beat, Tesla continues to trade at a steep premium relative to peers, with a market cap hovering around $1.34 trillion and a price-to-earnings ratio near 270.
Recent insider sales
Some Tesla insiders have sold stock as of late. CFO Vaibhav Taneja sold 2,606 shares in early September for just over $918,000, reducing his personal stake by about 21%. Director James R. Murdoch executed a far larger sale, offloading 120,000 shares for roughly $42 million and trimming his holdings by nearly 15%. Over the past three months, Tesla insiders have collectively sold 202,606 shares valued at approximately $75.6 million, as per SEC disclosures.
Tesla is currently entering its next phase of growth, and if it is successful, it could very well become the world’s most valuable company as a result. The company has several high-profile projects expected to be rolled out in the coming years, including Optimus, the humanoid robot, and the Cybercab, an autonomous two-seater with the potential to change the face of roads across the globe.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Investor's Corner
Ron Baron states Tesla and SpaceX are lifetime investments
Baron, one of Tesla’s longest-standing bulls, reiterated that his personal stake in the company remains fully intact even as volatility pressures the broader market.
Billionaire investor Ron Baron says he isn’t touching a single share of his personal Tesla holdings despite the recent selloff in the tech sector. Baron, one of Tesla’s longest-standing bulls, reiterated that his personal stake in the company remains fully intact even as volatility pressures the broader market.
Baron doubles down on Tesla
Speaking on CNBC’s Squawk Box, Baron stated that he is largely unfazed by the market downturn, describing his approach during the selloff as simply “looking” for opportunities. He emphasized that Tesla remains the centerpiece of his long-term strategy, recalling that although Baron Funds once sold 30% of its Tesla position due to client pressure, he personally refused to trim any of his personal holdings.
“We sold 30% for clients. I did not sell personally a single share,” he said. Baron’s exposure highlighted this stance, stating that roughly 40% of his personal net worth is invested in Tesla alone. The legendary investor stated that he has already made about $8 billion from Tesla from an investment of $400 million when he started, and believes that figure could rise fivefold over the next decade as the company scales its technology, manufacturing, and autonomy roadmap.
A lifelong investment
Baron’s commitment extends beyond Tesla. He stated that he also holds about 25% of his personal wealth in SpaceX and another 35% in Baron mutual funds, creating a highly concentrated portfolio built around Elon Musk–led companies. During the interview, Baron revisited a decades-old promise he made to his fund’s board when he sought approval to invest in publicly traded companies.
“I told the board, ‘If you let me invest a certain amount of money, then I will promise that I won’t sell any of my stock. I will be the last person out of the stock,’” he said. “I will not sell a single share of my shares until my clients sold 100% of their shares. … And I don’t expect to sell in my lifetime Tesla or SpaceX.”
Watch Ron Baron’s CNBC interview below.
@teslarati :rotating_light: This is why you need to use off-peak rates at Tesla Superchargers! #tesla #evcharging #fyp ♬ Blue Moon – Muspace Lofi
Tesla Robotaxi Safety Monitor seems to doze off during Bay Area ride
Tesla opens Robotaxi access to everyone — but there’s one catch
