JPMorgan thinks Elon Musk owes it some cash.
JPMorgan said in a regulatory filing Friday that it could lose $162 million from a tweet Musk posted announcing a potential go-private deal.
Musk has been on a bit of a streak in recent weeks: He’s also announced a potential fundraising round for Tesla, a tweet that some found questionable, and then an incorrect tweet about stock splits that he blamed on “a bug in my programming.”
The Securities and Exchange Commission is investigating Musk’s tweet, which said that a group of investors would take Tesla private for $420 a share. Musk on Thursday characterized that tweet as “inaccurate.”
First, JPMorgan said it is working with an outside “special committee” on the Tesla’s board to evaluate the potential offering of Tesla shares.
But the “majority” of Tesla’s shareholders tend to be institutional investors with “strong liquidity needs.” The filing does not identify the investors under consideration. JPMorgan said it thinks the equity financing it’s working on with the committee “may generate a fair return” for all Tesla shareholders.
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As for the $162 million, JPMorgan said it expects to collect approximately $100 million and “substantially” will recognize an impairment charge in its third quarter.
Many of the suggested changes to Musk’s tweet during the investigation may be recoverable, the firm said, but those changes could further pressure Tesla’s valuation.
“We believe the risk of a change in vote could increase materially” if the SEC forces Musk to take down the tweet, JPMorgan said.
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