Elon Musk has threatened to give JPMorgan ‘a one-star review on Yelp’ unless the bank withdraw a $162 million lawsuit against him, accusing him of violating their agreements with his erratic and provocative tweets.
Musk in August 2018 tweeted that he had enough funding to take his company Tesla private, referencing 420 – the slang for marijuana.
The tweet sent the share price on a rollercoaster ride, and Musk was fined by the Securities and Exchange Commission (SEC) in October 2018: he was ordered to pay $20 million, and Tesla ordered to pay the same.
On November 15 the bank sued, and The Wall Street Journal on Monday reported on the intense animosity between Jamie Dimon, the head of the bank, and Musk.
Musk and Dimon have attempted to restore their relationship, sources told the paper, but were unable to find common ground.
JPMorgan, America’s biggest bank, reportedly concluded that it was better off without the most valuable car manufacturer in the U.S., the paper said.
‘We have provided Tesla multiple opportunities to fulfill its contractual obligations, so it is unfortunate that they have forced this issue into litigation,’ JPMorgan said last week.
On Monday, Musk retorted: ‘If JPM doesn’t withdraw their lawsuit, I will give them a one star review on Yelp. This is my final warning!’
Elon Musk (left) and Jamie Dimon, the chief executive of JPMorgan, have repeatedly clashed and been unable to resolve their differences. On Monday Musk said he gave them a ‘one-star Yelp review’
The South African-born billionaire on Sunday night tweeted: ‘I aspire to comedy’.
It is unusual for a major Wall Street bank to sue such a high-profile client, although JPMorgan has done relatively little business with the electric carmaker over the past seven years, according to Tesla’s filings and Refinitiv data.
The bank accused the electric car company of ‘flagrantly’ breaching a contract the two corporate giants agreed in 2014 relating to warrants Tesla sold to the bank.
Warrants give the holder the right to buy a company’s stock at a set ‘strike’ price and date.
The suit, filed in a Manhattan federal court, centers on a dispute over how JPMorgan re-priced its Tesla warrants as a result of Musk’s notorious 2018 tweet that he was considering taking the carmaker private.
According to the complaint, Tesla in 2014 sold warrants to JPMorgan that would pay off if their ‘strike’ price was below Tesla’s share price when the warrants expired in June and July 2021.
JPMorgan said the warrants contained standard provisions that allowed it to adjust their price to protect both parties against the economic effects of ‘significant corporate transactions involving Tesla,’ such as an announcement the company was going private.
Dimon, who has headed the largest bank in the U.S. since 2005, has been unimpressed by Musk’s antics
The mercurial Musk fired his press team in October 2020 and now deals with the media himself
Tesla’s share price rose approximately 10-fold by the time the warrants expired this year, and JPMorgan said this required Tesla under its contract to hand over shares of its stock or cash. The bank said Tesla’s failure to do that amounted to a default.
‘Though JPMorgan’s adjustments were appropriate and contractually required,’ the complaint said, ‘Tesla has flagrantly ignored its clear contractual obligation to pay JPMorgan in full,’ the bank said.
Tesla in February 2019 complained that the bank’s adjustments were ‘an opportunistic attempt to take advantage of changes in volatility in Tesla’s stock,’ but did not challenge the underlying calculations, JPMorgan said.
Musk, who turned 50 in June, has gradually become more and more unhinged since the summer of 2018 – what Tesla staffers call ‘the summer of 420’ when he tweeted about taking his company private with no real information about it, smoked a joint on the Joe Rogan podcast and called a British diver who rescued Thai school boys from a cave a ‘pedo’.
On November 6, Musk asked his 60 million Twitter followers if he should sell some of his Tesla stock.
‘Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my stock,’ he wrote.
According to Musk, 58 per cent of those who responded said yes.
Musk also conceded his wealth is tied up in stock, tweeting that he doesn’t get a cash salary or bonus from anywhere.
‘I have only stock, thus the only way for me to pay taxes personally is to sell stock,’ he wrote.
His erratic behavior has staff so worried that they wake up in the morning and check his Twitter to see if anything he may have posted overnight can damage his companies, according to one former staffer quoted by Vanity Fair in an article in November 2020.
‘We all wake up and look at it every day, thinking, Oh, God, now what? You really had no idea what you were going to see,’ the anonymous staffer said.
Elon Musk at the Tesla factory in Berlin on September 3, 2020
While they all hail him as a ‘genius’, his unhinged behavior over the last year has revealed to the public a side of him they claim they always knew about.
‘The thing about Elon is, that right now, everyone else is finally seeing the way he has always been.
‘He’s being the same Elon he has always been in private…he’s just being Elon a lot more publicly,’ a former Tesla employee said.
On the launch days at SpaceX – his rocket company – they say they worry about whether or not a mission is successful because it will impact his mood.
Other sources described his behavior as ‘degenerate’.
One example was that he was angry that a girlfriend had tiny hairs on her face and asked her why as they were leaving a nightclub.
Musk was reportedly angry because the bright lights of the club’s awning made the hair more visible.
When he asked her why she had hairs on her face, she replied: ‘Because I’m a mammal’ which, the source said, enraged him.
‘There is a high level of degenerate behavior with Elon. There’s a paranoia: Are you with me or against me? I genuinely want to leave the room sometimes when he walks in,’ the person said.
Musk appeared on Rogan’s podcast in 2018 and smoked marijuana
That same summer, he tweeted he was taking Tesla private at $420 a share – a reference to marijuana
Musk also tweeted that summer calling a British diver a ‘pedo guy’
He went on to say that Musk was similar to ‘Zuck’ – Facebook’s Mark Zuckerberg – and others.
‘All of these guys, I’ve spent time with them, Musk, Zuck, all of them; they all exhibit tendencies of total and complete pathological sociopathy.
‘They don’t at their core give a flying f**k about you or me as individuals.’
Musk has fired the PR teams he works with in October 2020 and now represents himself in the media.
When contacted by Vanity Fair for their piece, he replied to the journalist: ‘Vanity Fair sucks’ and made sure the quote was attributable to him.
‘Elon is his own communications director now,’ one person said.
Musk turned on the media in November 2019 after defending himself at trial against British diver Vernon Unsworth, who he called a ‘pedo’.
The trial revealed the extreme lengths Musk went to to prove his claims after tweeting it without evidence.
He hired a private investigator to dig up dirt on Unsworth and sought to find some proof that he was an unsavory character.
He also tried to tell journalists about Unsworth but in an off-the-record capacity. When a BuzzFeed journalist published his comments, he was furious.
After the trial, he started blocking journalists on Twitter. A judge sided with Musk.