COMPANY NEWS IN BRIEF

JPMorgan sues Tesla for US$162 mln

JPMorgan Chase & Co on Monday sued Tesla Inc for US$162.2 million, accusing Elon Musk's electric car company of "flagrantly" breaching a contract related to stock warrants after its share price soared.

According to the complaint filed in Manhattan federal court, Tesla in 2014 sold warrants to JPMorgan that would pay off if their "strike price" were below Tesla's share price upon the warrants' expiration in June and July 2021.

JPMorgan, which said it had authority to adjust the strike price, said it substantially reduced the strike price after Musk's Aug. 7, 2018 tweet that he might take Tesla private at US$420 per share and had "funding secured," and reversed some of the reduction when Musk abandoned the idea 17 days later.

But Tesla's share price rose approximately 10-fold by the time the warrants expired, and JPMorgan said this required Tesla under its contract to deliver 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."-Nampa/Reuters

Home Depot beats sales estimates

Home Depot Inc beat quarterly sales estimates by nearly US$2 billion on Tuesday as Americans, buoyed by a strong housing market, hired more builders and handymen to complete large home improvement projects, boosting demand for tools and materials.

Professional contractors have been rushing back to Home Depot's stores as they look to upgrade their toolkits and source building materials to complete a backlog of home improvement and repair jobs that were put on hold during the health crisis.

Rising home prices in the United States has also given people confidence to invest in upgrade jobs for their homes, while more millennials moving to suburban areas during the pandemic has expanded the core customer base of retailers like Home Depot.

Same-store sales rose 6.1% in the third quarter ended Oct. 31, beating analysts' estimates of a 1.4% increase, according to IBES data from Refinitiv.

Home Depot said the average price paid per transaction rose nearly 13% in the quarter, boosted by more big-ticket purchases from builders. -Nampa/Reuters

Walmart sets aside supply woes

Walmart Inc on Tuesday raised its annual sales and profit forecast in anticipation of soaring demand during the crucial holiday season even as global supply chain woes hit its margins in the third quarter.

Major retailers including Amazon.com have been struggling to bring products into the United States ahead of the peak shopping season due to shipping logjams, shuttered factories in parts of Asia and a scarcity of raw materials in the recent months.

Walmart, which has been chartering its own vessels to move goods, said US inventory was up 11.5% ahead of the busy festive season.

"We have the people, the products, and the prices to deliver a great holiday season for our customers and members," Chief Executive Officer Doug McMillon said in a statement.

The bold forecast from Walmart come in contrast to rival ecommerce giant Amazon, which issued an underwhelming fourth-quarter outlook and warned of higher costs during the holiday period to weigh on a surge in demand for online shopping. -Nampa/Reuters

Qualcomm forecasts sales growth

Qualcomm Inc said on Tuesday it expects chip sales to Apple Inc to dwindle to a trickle in the coming years but predicted brisk growth in chips for autonomous cars and other connected devices, sending shares up 4.5%.

Qualcomm currently supplies all of the modem chips that connect Apple's devices to mobile data networks, but Apple is working on its own modem chips.

At an investor conference in New York, Qualcomm executives said they expect to supply only 20% of Apple's modem chips by the launch of the iPhone in 2023. Qualcomm Chief Financial Officer Akash Palkhiwala expects Apple to make up a "low single-digit" percentage of the company's chip sales by the end of fiscal 2024.

But Apple losses will be more than offset by gains in other fields, Qualcomm executives said.

Qualcomm expects revenue from the automotive sector, where sales were just under US$1 billion in fiscal 2021, to reach US$3.5 billion in five years and US$8 billion in 10 years. Earlier on Tuesday, Qualcomm landed a deal to sell self-driving car chips to German automaker BMW.

Qualcomm executives said that Apple had fostered a market for devices such as smart watches and premium wireless headphones. -Nampa/Reuters

Evergrande dissolves some units

China Evergrande Group has dissolved several district-level units of Fangchebao (FCB), its online real estate and automobile marketplace, due to shrinking capital and business, Chinese media outlet Cailianshe reported on Wednesday, citing sources close to the embattled developer.

FCB had planned for an initial public offering (IPO) late this year or early next year. Evergrande in March sold 10% of the company to 17 investors for US$2.10 billion, at a pre-financing valuation of over 150 billion yuan (US$23.48 billion).

Evergrande did not immediately respond to request for comment. The world's most indebted property developer, with more than US$300 billion in liabilities, has been scrambling for funds to pay its many lenders as well as contractors.

It had hoped to spin off businesses including FCB and bottled water to raise fund. -Nampa/Reuters