Musk’s Tesla post caused JPMorgan to lose $162m

JPMorgan has come out swinging over the electric car company’s sharing of confidential information on US social media channel Twitter in the wake of CEO Elon Musk’s arrest for alleged securities fraud. Musk was…

Musk's Tesla post caused JPMorgan to lose $162m

JPMorgan has come out swinging over the electric car company’s sharing of confidential information on US social media channel Twitter in the wake of CEO Elon Musk’s arrest for alleged securities fraud.

Musk was arrested on Monday evening after US regulators alleged he lied about having had funding in place to take Tesla private. The charge came after the executive posted a surprise tweet to his more than 8 million followers that he was planning to take Tesla private.

He later deleted the post, but not before it had a chilling effect on investors who feared their investments in the company could be jeopardised.

Read more: Tesla working on additional models as it adds 1,000 jobs

The financial services company has now claimed it has lost $162 million as a result of the incident, according to a filing with the Securities and Exchange Commission. The filing also claims that it suffered due to the fall in the stock price.

JPMorgan wrote in its filing that it holds around one million shares in Tesla. The stock price dropped from around $349.86 to $274.25 in a day.

Musk’s social media travails have been widely criticised. The new federal crime, if the allegations are proven, could see Musk banned from running a public company for a number of years.

He could also have his salary cut.

Whether the charges are serious enough to jeopardise his career is unclear. But a source of humiliation cannot be ruled out, especially after the Securities and Exchange Commission – which brought the charges – added the possibility of jail time.

In response to the arrest, Tesla released the following statement:

“With the appointment of a temporary CEO, there will be no further disruption to Tesla’s day-to-day operations and there is no change to our previous guidance. Beyond that, as previously stated, Tesla will continue to cooperate with the authorities.”

Asked to comment on JPMorgan’s claim that the company is owed $162 million, Tesla declined to respond.

Musk has built a stake in the company after its stock surged following its huge Model 3 production numbers in late 2017. In April 2018 the company had a market cap of $84 billion.

Tesla is scheduled to report full-year earnings on 1 April.

Read more: Making sense of the Tesla-SEC scandal

Shares in Tesla were last trading down 2.3% at $279.31 on the Nasdaq on Thursday.

Image caption Tesla CEO Elon Musk has been charged by the SEC with securities fraud after he tweeted about a plan to take the company private

This article was written by Rory Kerr for BBC News’ Trader Magazine.

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