Tesla Shares Continue to Slide as JP Morgan Takes Legal Action

November 16, 2021 08:30

The Tesla sell-off continues into a second week, following CEO Elon Musk´s twitter poll regarding the sale of his shares, and the company just cannot seem to stay out of the headlines. 

On Sunday, Musk took to Twitter once again, this time choosing to start a fight with US Senator Bernie Sanders, who had earlier posted that the wealthy should pay their “fair share” in tax. Musk responded to the senator by saying "I keep forgetting you’re still alive”, which he then followed up with “Want me to sell more stock, Bernie?”. 

Last week, Musk sold 934,000 shares for a grand total of $1.1 billion and, yesterday, US securities filings showed that he had sold a further 934,091 shares for around $930 million on Monday. However, both of these sales were set up back in September and it remains unclear whether Musk intends to shed yet more shares in accordance with his Twitter poll. 

Since the poll on 6 November, the electric car manufacturer’s shares have fallen a remarkable 17.31% and they continued to fall last night in after-hours trading. 

This after-hours fall in share price followed the news that, on Monday, JP Morgan Chase sued Tesla for $162.2 million.  

In their complaint, the bank claimed that Tesla had “flagrantly ignored its clear contractual obligation to pay JPMorgan” in reference to stock warrants bought by JP Morgan in 2014 which expired in June and July this year.  

JP Morgan’s complaint further stated that the warrants “required Tesla to deliver either shares of its stock or cash to JPMorgan if, at the time the warrants expired, Tesla’s share price was above the contractual ‘strike price.’” 

We will have to wait and see how the market reacts when it opens later today, but it would be of little surprise if the Tesla sell-off continues. Regardless of what happens today, we can expect to see further volatility for Tesla shares in the coming sessions. 

Depicted: Admirals MetaTrader 5 – Tesla Daily Chart. Date Range 1 April 2021 – 15 November 2021. Date Captured: 16 November 2021. Past performance is not a reliable indication of future results.

 

Five year evolution of the Tesla share price: 

  • 2020 = +742.62% 
  • 2019 = +27.21% 
  • 2018 = +5.89% 
  • 2017 = +46.38% 
  • 2016 = -11.38% 

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Roberto Rivero
Roberto Rivero Financial Writer, Admirals, London

Roberto spent 11 years designing trading and decision-making systems for traders and fund managers and a further 13 years at S&P, working with professional investors. He has a BSc in Economics and an MBA and has been an active investor since the mid-1990s