Tech Imitates Tesla in the Wrong Way

Mark Gongloff

15 Aug 2018, 02:08 AM IST

Today’s Agenda

Young tech companies sure are burning a lot of cash.
The Endangered Species Act is itself endangered.
Contra Trump, the post-World War II global order deserves saving.
Turkey will come to regret palling around with Russia and Iran.
Cigna may come to regret beating Carl Icahn.

Tech Has Its Own Wildfires Blazing

(Bloomberg Opinion) -- One reason Tesla Inc. has been in the news lately is because it burns through bushels of cash, leading it to worry about running out of money, leading it to need an attractive stock price, inspiring Elon Musk to tweet a lot in order to scare away short-sellers.

Most public companies are not nearly as entertaining as that (don’t even get me started on Azealia Banks). But an alarming number of them have one thing in common with Tesla: They too burn through heaps of cash. Shira Ovide studied 150 U.S. tech companies that have gone public since 2010 and are still in business and found that 37 percent of them have negative cash from operations – up from 29 percent four years ago.

What does this mean? “This trend is not healthy,” Shira writes. “Companies that persistently take in less cash than they need to run their businesses risk losing control of their own destinies.” This sort of sounds a lot like the predicament into which a certain electric-car maker has gotten itself. But while Tesla can jet around asking Saudi Arabia, Silver Lake and Masa Son for help, most tech companies don’t have that luxury. Click here to read Shira’s whole analysis.

The Endangered Species Act Is Now Endangered Too

Forty-five years after the passage of the Endangered Species Act, businesses, land developers and other opponents are trying to undermine it in the courts, in Congress and federal agencies. Success could mean weakening protections most Americans favor and – more critically – the end of many species, Bloomberg’s editors warn. President Donald Trump almost certainly won’t do anything about it, and the courts are a crapshoot. But Congress can and should act now to keep the ESA strong, the editors write.

What Trump Doesn’t Get About the World Order

As you've probably heard, Trump is trying to dismantle the Post-World War II global order, under the guidance of svengalis such as Steve Bannon and Stephen Miller. And they’re not the only people who think the global order is a myth or something better tossed aside in favor of raw nationalism, points out Hal Brands. In the first of three columns exploring that order and the threats it faces, he explodes some of the myths such critics expound. For example, there’s the idea that globalism undermines American interests. In fact, Hal writes, it has been the smartest way to keep America strong and safe for the past several decades. Click here to read the whole thing.

Soft power has played a big role in the post-war order, with America (mostly) trying to set a good example for the rest of the world on stuff like democracy, the rule of law and free trade. Even when it hasn’t, past presidents have at least pretended to care about that stuff. Trump does not, and that will undermine America’s strength too, writes Tyler Cowen: “America is now exporting the notions that corruption and intolerance are a perfectly normal part of the executive branch of government, even in the world’s No. 1 economic and military power. … Over time, those ideological ‘exports’ may prove a bigger problem than any particular misguided Trump policy.” Click here to read the whole thing.

Turkey’s Troubling New BFFs

Trump’s relationship with authoritarian Turkish President Recep Tayyip Erdogan got off to a good start last year, the beginning of what Trump called “a great friendship.” As so often happens with new friends, though, they have fallen out, and Erdogan is hanging with a new gang, one that includes Russia and Iran. But if Erdogan chafed at Turkey playing second fiddle to America, he’s really not going to enjoy being Vladimir Putin’s sidekick for long, writes Therese Raphael. (At the very least, he may soon miss his iPhone.)

Turkey’s diplomatic blow-up with the U.S. has contributed to the lira crumbling in recent weeks, raising fears of contagion spreading around the world. But the lira has recovered a bit lately. And U.S. Treasury debt – the safe-haven canary in the global-market coal mine – shows little sign of contagion, writes Brian Chappatta.

Carl Icahn Surrenders to Cigna

Just one week after launching a crusade to stop Cigna Corp. from buying pharmacy benefit manager Express Scripts Holding Co., Carl Icahn has, quickly and uncharacteristically, surrendered. He simply got into the fray too late to make a difference, writes Max Nisen. But DO NOT CONGRATULATE Cigna – Icahn was right to worry about the merger, Max writes.

Chart Attack

Home Depot is no fixer-upper, says Sarah Halzack.

Quick Hits

The Great Recession has hammered college humanities, as more students now just want to make a buck. – Noah Smith

China must change its ways, or Trump will just be the precursor to even greater confrontation. – Penny Pritzker

Yuck it up about the Space Force all you want, but we actually need one. Even more urgently, we also need a Cyber Force. – James Stavridis

China’s Manbang is like Uber for trucking – but it doesn’t deserve its Uber-like hype. – Anjani Trivedi

China’s Bitmain, which makes Bitcoin-mining equipment, is thinking of going public – and it might be the most useful thing to come out of the crypto craze so far. – Lionel Laurent

Montenegro is accusing a former U.S. spy of trying to help kill its prime minister. But the charges look thin. – Eli Lake

ICYMI

Crypto is melting down. Paul Manafort’s defense rested its case without calling witnesses. The Trump-Omarosa feud continued. A terrible bridge collapse in Italy killed at least 25 people.

Kickers

Office wellness programs benefit those who need them the least, a study has shown. – Faye Flam

There’s no such thing as luck.

Tumblr is better than Twitter, and we should all go back there.

Somebody made a whole grocery store out of felt.

Here are 30 photos of the Northeast Blackout, which happened 15 years ago today.

Note: Please send felt, suggestions and kicker ideas to Mark Gongloff at mgongloff1@bloomberg.net.

***

New subscribers can sign up here.

Like Bloomberg Opinion Today? Subscribe to Bloomberg All Access and get much, much more. You'll receive our unmatched global news coverage and two in-depth daily newsletters, The Bloomberg Open and The Bloomberg Close.

To contact the editor responsible for this story: Timothy L. O'Brien at tobrien46@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mark Gongloff is an editor with Bloomberg Opinion. He previously was a managing editor of Fortune.com, ran the Huffington Post's business and technology coverage, and was a columnist, reporter and editor for the Wall Street Journal.