DealBook Briefing: Does Bank of America Care About Investme…


With a federal investigation, a long line of departing senior executives, and fears about an unpredictable C.E.O., it’s easy to forget about Tesla’s dire financial situation. But Bill Cohan explains in an NYT Op-Ed just how bad things are:

Tesla’s finances are fragile. It has around $11 billion in long-term debt and no profits. “That is not a sustainable business model,” Jim Collins, a longtime auto industry research analyst, wrote in Forbes in April. “Not even close.” From January to June of this year, Tesla generated revenues of $7.4 billion, but it had an operating loss of $1.7 billion, burning through its cash on hand. It has $2.2 billion left, most of which will be needed to cover operating losses. Romit Shah, a research analyst at Nomura Instinet and once one of Tesla’s biggest boosters, reversed course last week, calling the company “no longer investable.”

Tesla’s vice president of global supply management, Liam O’Connor, has reportedly resigned.

Thomas Rothman will stay on as chairman of Sony Pictures Entertainment.

Qatalyst Partners hired Ethan Zweig, a tech investment banker at JPMorgan Chase, as a managing director.

Wells Fargo plans to lay off up to 10 percent of its employees over the next three years.

Deals

• Emirates is reportedly considering a takeover of its unprofitable rival, Etihad, to create the world’s biggest airline by passenger traffic. (Bloomberg)

• AT&T defended the court ruling that let it buy Time Warner, arguing the Justice Department’s appeal had no merit. (WSJ)

• Uber is said to be in talks to buy Deliveroo, the European food-delivery service. (Bloomberg)

• Adobe agreed to buy the online marketing company Marketo for $4.75 billion. (WSJ)

• Aurora Cannabis, the marijuana producer, plans to go public in the U.S. this fall. (Financial Post)

Politics and policy

• Michael Cohen has spoken repeatedly with Robert Mueller’s team over the past month. (NYT)

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