Tesla Shares Continue to Slide as JP Morgan Takes Legal Action
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.
Five year evolution of the Tesla share price:
- 2020 = +742.62%
- 2019 = +27.21%
- 2018 = +5.89%
- 2017 = +46.38%
- 2016 = -11.38%
With the Trade.MT5 account from Admirals, you can trade Contracts for Difference (CFDs) on Tesla and over 3,000 other shares from 15 of the largest stock exchanges in the world! CFDs allow traders to attempt to profit from both rising and falling prices, whilst also benefiting from the use of leverage. Click the banner below in order to open an account today:
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
- With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.
- The Analysis is prepared by an independent analyst Roberto Rivero, Freelance Contributor (hereinafter "Author") based on personal estimations.
- Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
- Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.