Oracle made it two whole days into No Nut November…

Welp, David’s daddy (read: Oracle founder Larry Ellison) is at it again. And by “it,” we mean running a little low on cash. 

Oracle filed Monday to raise a cool $20B in one go with $10B in common stock (about 76.5M new shares) and another $10B in investment-grade bonds split across six tranches. Shares slipped about 2% premarket, because of course they did.

Friendly reminder, at last Wednesday’s investor day, Larry and co. promised to cap all new fundraising through fiscal 2030 at $20B, half stock and half debt. Turns out it was never just the tip, Larry. To be fair, Oracle technically kept its word. The cap was $20B, and this is $20B. It’s just that the company got a four-year allowance funding cap and spent it all at once.

The stock half lands on top of the $20B in shares Oracle already sold earlier this fiscal year through an at-the-market program (read: quietly dribbling new shares onto the market). Meaning, the baby back b*tches (read: ORCL shareholders, me) just got diluted… again. For context, $10B over 76.5M shares works out to roughly $130 a pop, about 60% below where ORCL peaked. 

As for the bonds, maturities run from two years out to 2046, and early pricing talk on the longest one was around 3.6 percentage points over Treasuries, which, fair. S&P already rates Oracle BBB- (read: one notch above junk), and it’s sitting on a whopping $125B in borrowings after free cash flow came in at -$23.7B last fiscal year. Not great, Bob.

The money is for “general corporate purposes” (lol). And Larry’s pitch for why this is the last war chest he’ll need? Oracle keeps yeeting cash at AI data centers through fiscal 2028, then capex steps down, free cash flow flips positive in the back half of fiscal 2028, and the company is self-funding by fiscal 2029.

“Gotta spend money to make lose money.” - Larry, I assume

Now, that plan only works if Oracle’s $664B backlog actually turns into cash. Roughly half of it is OpenAI, a company that has never turned a profit. Which, sounds legit. Regardless, we’ll see what kind of clusterf*ck this turns into in the meantime. 

Place your bets accordingly, until next time, friends… 

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.