Larry Ellison Pledges $9 Billion in Oracle Shares to Finance the Warner Bros Agreement As the Stock Price Falls and Credit Default Swaps Peak

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BY SRH

Two weeks after the Larry Ellison inexplicably pulled his plan to sell up to 50 million shares, worth about $7.5 billion news of which had sent the stock sliding the day prior, the Oracle CEO – the key figure behind Paramount Skydance’s deal to buy Warner Bros. Discovery – has pledged 67 million more shares of Oracle as collateral for personal loans than he had at the same time last year, approximately 350 million shares.

The shares pledged, revealed in an Oracle Schedule 14A filing on Friday, amount to a 19% increase in the number of shares Ellison has pledged since 2025. The stock is worth about $9.2 billion at Oracle’s closing price of $137.10 on Friday.

As Bloomberg notes, Ellison has been helping his son David’s company, Paramount, acquire Warner Bros. in a transaction valued at $111 billion. The Ellisons have committed to $47 billion in equity funding for that deal, about $24 billion of which is coming from three Middle Eastern sovereign wealth funds, and much of the rest now appears to be sourced from pledge ORCL shares. 

Paramount is also looking to raise debt financing.

Having negotiated a settlement earlier this week with 12 state attorneys general and the Writers Guild trade union who had sued to block the merger, Paramount is now just one step away from sealing its deal for Warner Bros.

While Oracle officers and directors are forbidden from pledging company shares as collateral for personal loans, there is one exception: Larry Ellison – who serves as the company’s executive chair and chief technology officer.

The total stock pledged now represents about 36% of Ellison’s total holdings of 1.16 billion shares; in dollar terms that amount to just over $57 billion in ORCL stock pledged. 

The regulatory filing also disclosed that Oracle’s co-chief executive officers will receive $870 million in combined stock option awards. The package of Clay Magouyrk was valued at $621.7 million, while Mike Sicilia’s was worth $248.7 million. The executives were named to the joint CEO role a year ago, taking the job from Oracle veteran Safra Catz. Ellison, who didn’t receive awards in the previous two fiscal years, got a package valued at $117.8 million.

The 82-year-old technology mogul announced plans earlier this month to sell as much as $7.5 billion in Oracle stock, but then quickly canceled those plans, which may have been the result of the stock price’s precipitous drop.

Aside from the Warner Bros. deal, Oracle has been caught up in an escalating data center fiasco, having announced force mejeure on its largest data center in New Meixco, the 2.25GW Project Jupiter complex, which has advised the project developer it will be unable to meet some contractual obligations due to lack of power at the facility as a result of regulatory delays.

The Force Majeure sent ORCL bond yields surging to a record high, despite a relatively muted reaction in the stock – which nonetheless trades near 52 week lows…

… and will likely trade even lower once it notices that ORCL CDS have also just hit a new record wide, as the company’s default risk has never been higher

As such, one wonders at what stock prices does ORCL get a margin call and is forced to source liquidity, potentially leading to a collapse in the Warner Bros takeover (at a wildely inflated price) as suddenly it finds itself without the funds to do so.  Source: ZeroHedge

 

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