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Tesla to hand over Musk's emails to JPMorgan in lawsuit over 2018 tweet

Published 2023-07-19, 01:19 p/m
© Reuters. FILE PHOTO: Elon Musk, Chief Executive Officer of SpaceX and Tesla and owner of Twitter, gestures as he attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition centre in Paris, France, June 16, 202
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By Luc Cohen

NEW YORK (Reuters) - JPMorgan Chase (NYSE:JPM) will get to review some of Elon Musk's emails as it pursues a lawsuit against Tesla (NASDAQ:TSLA) over a bond contract dispute that arose after Musk tweeted he might take his electric car company private.

In a Wednesday hearing in Manhattan federal court, U.S. Magistrate Judge Ona Wang gave Tesla four weeks to turn over emails from Musk's account at his rocket manufacturing company SpaceX, to allow JPMorgan enough time to prepare for witness interviews.

The largest U.S. bank says Musk communicated through the SpaceX account about taking Tesla private, an idea Musk floated in August 2018 by tweeting he had "funding secured" for a possible buyout though none was close.

JPMorgan plans to depose Musk in December, Tesla lawyer Nathan Goralnik said at the hearing.

"SpaceX is not an alter ego of Mr. Musk, but we don't expect there to be any issue getting those documents produced," Goralnik said.

JPMorgan sued Tesla for $162.2 million in November 2021, saying Tesla breached a 2014 contract related to stock warrants it sold to the bank, and which JPMorgan believes became more valuable because of Musk's tweet.

Warrants give the holder the right to buy a company's stock at a set "strike" price and date.

JPMorgan said it was obligated to reprice the warrants after Musk's notorious tweet, and that a subsequent ten-fold increase in Tesla's stock price required that company to make payments, which it has not done.

Tesla countersued JPMorgan in January, accusing the bank of seeking a "windfall" when it re-priced the warrants.

© Reuters. FILE PHOTO: Elon Musk, Chief Executive Officer of SpaceX and Tesla and owner of Twitter, gestures as he attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition centre in Paris, France, June 16, 2023. REUTERS/Gonzalo Fuentes/File Photo

A federal jury in San Francisco in February found Musk and Tesla not liable for misleading investors with the tweet.

Musk, who bought Twitter last year for $44 billion, agreed in a 2018 deal with the U.S. Securities and Exchange Commission to get preapproval from a Tesla lawyer for some tweets. A federal appeals court is considering his bid to end that agreement.

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