Happy "Oracle has lost more than 60% of its value since the peak one year ago" to all those who celebrate
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Exactly. Normally, these graphs are misleading because the price spiked for stupid reasons and, yes, it’s dropped, but it’s still above where it was before the stupid spike. This graph is misleading for the opposite reason.
They’ve taken on around £50 B of debt since the last time they were valued at this price. And that’s on top of their existing debt, which had been gradually growing for a few years. They currently owe £130 B, not including off-the-books bonds.
Their ability to service those debts is predicated on revenue from OpenAI, which is also facing a cash flow issue. They were planning an IPO, but members of their senior leadership team that need to sign off on the accounts to be submitted and face legal penalties for misleading investors are quitting instead of signing. Unless OpenAI either completes an additional funding round at close to the goal price for IPO (who would invest? You can just wait and buy at the same price at IPO with much less risk) or manages to both IPO and keep issuing new shares without tanking their stock price to generate additional cash, Oracle is going to struggle to service the loans.
The credit agencies know this. Their credit rating is now sitting one point above junk status. This means that future lenders expect that there’s a good chance that Oracle would default and so will charge high interest rates to compensate for this, which means loans are no longer available as a way of papering over cash flow shortfalls.
Oracle’s short-term future depends on how much Huang is willing to keep propping them up, and that depends on NVIDIA’s bubble price not collapsing.
@gabrielesvelto @mousey All in favour of anything that hurts Larry Ellison.
@gabrielesvelto please can you replicate it with, SK, Samsung, microslop, Nvidia, etc 🥺🥺🥺🥺🥺
@Noxie Microsoft and SK are a bit lower than where they were one year ago, the others will come down eventually when the AI bubble bursts. Oracle will have a part in it since it pledged to buy a lot of hardware. Once it runs out of money to pay the others it'll be a really cool domino. 🍿
@gabrielesvelto me millennial having lived through recession after recession from my most early days, just waiting to watch the world burn 😅
@gabrielesvelto
It couldn't have happened to a nicer company.
@gabrielesvelto I want to see him permanently driven from his Hawaiian compound and the land reclaimed by natives.
@gabrielesvelto Is that thanks to, or in spite of AI?
@Scubyw my guess is thanks to AI. Oracle is massively indebted because of that, and they also have negative cash flows so they can't even buy back their shares to prop the price.
@gabrielesvelto
Wonderful!! I just received notice of my Oracle privacy settlement. I'm curious how much it is. Recently the one from Facebook was around $30. Can't remember exactly. That was for stealing all my data back in the Cambridge Analytica era. That's how long it took. 😐
Guess the Oracle didn’t foresee that.
@gabrielesvelto HELL YESSSS IM BRINGING OUT THE WINE
@gabrielesvelto is Oracle a currency?
@2003MugishaPhocit it is a large tech company that has heavily invested in AI and whose owner has been an enthusiastic supporter of the Trump administration
@gabrielesvelto okay,
And I have heard most Americans not supporting Trump,is it the same story with you?
@gabrielesvelto Each time I see these Oracle charts, I run a backup of my Oracle "Always Free" cloud instance. 🥲
@gabrielesvelto I'm imagining a world where you don't have to ship the entire language version in your .jar file because Oracle has poisoned the ecosystem. Small efficient downloads. It's a beautiful dream.
@gabrielesvelto Looks like investors are starting to question if Oracle will actually get paid for all the data centre buildouts they have been doing for the AI companies.
