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I would assume it's to hire more lawyers.
Half of that would be in stocks, resulting in 2.5% dilution for shareholders at the current market cap. But the stock is down 8%.
It's not dilutive -- current shareholders get $10B (or 97% of $10B, whatever). Market reaction is some combination of profitability concern / bankruptcy risk because Oracle is super leveraged and taking on even more debt. Maybe the AI hyperscalars will slow down spending in 2028.
It’s literally dilutive. Current shareholders now only own 97.5% of the equity instead of the 100% they owned previously.
Yes, even if the company raises $10b, the ownership and voting power of a share is reduced by 2.5%.
Previously, I thought investing in AI companies would be a good hedge against AI taking my job, but I hadn't considered the possibility that they fund the build out by issuing shares. Is there no reprieve?
maybe not. There could be mass unemployment and all the big dogs could also lose from the buildout while smaller players (non-public) take over. It could be a lycos / yahoo / google situation where there was no "winner" to invest in during the initial dotcom crash, and there was large-scale disruption all the same.
Not for people like us.
Skynet finally? (Terminator movie used Oracle building as Skynet HQ, forgot which one)
We are b-roll in the skynet/oracle cinematic universe.
I hope nothing but the worst for Oracle as a corporation...though nothing against the technical talent there.
Misread the title at first as "to finance AI bailout".
LOL.. It is that under the cover.
Of all the companies in the world this is one of the ones I root against the hardest. Hoping for the worst outcome on this investment.
Yeah I hope they get bought by Broadcom, like VMWare and the board sends Larry straight to retirement.
Do not make the mistake of anthropomorphizing Larry Ellison!
[dead]
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