Oracle founder Larry Ellison (photo) will not be selling any shares in his company for the time being. The 82-year-old chairman has withdrawn a plan that would have allowed him to sell up to 50 million shares. At the current market price, that block of shares is worth approximately $7.5 billion.
The sale plan was dated June 22 and was set to run through October 24. Oracle announced that Ellison did not exercise this option, Reuters reports. No shares were sold under the plan, and the company said Ellison currently has no other plans to reduce his stake. Oracle did not say why it withdrew the plan.
Stock price under pressure
Oracle’s CEO owns more than 38 percent of Oracle, making him by far the largest shareholder. His decision comes as the company’s stock price is under pressure. Since the beginning of this year, the stock has lost nearly 23 percent. Compared to June 18, shortly before Ellison drew up the sale plan, the decline amounts to more than 18 percent.
Investors are particularly concerned about the substantial investments Oracle is making to expand its cloud and AI infrastructure. These high capital expenditures are pressuring free cash flow and are largely financed by debt.
Cash flow concerns persist
The most recent quarterly results offered some relief. Oracle outperformed Wall Street’s expectations, and the cash outflow was lower than anticipated. This initially pushed the stock price higher on Friday.
However, those gains were later erased. Analysts warned that it may take time for the higher investments to translate into a clear recovery in cash flow.
At the same time, reorganization costs continue to rise. Oracle expects these costs, which are related, among other things, to job cuts, to increase by approximately $700 million.