TerryLaze bit_user said: The original purchasers claim that demand wouldn't have been nearly so high, if Oracle had been up front about how much debt they planned to issue. From how I read it they just complain about oracles rating going down and them losing money. They say that oracle said 'may need' even though they think oracle was sure to need more but if oracle said may then that should already be a concern while buying, you already know there is the possibility, you are already informed. (Also if you are buying bonds and think that 18bil is going to get any company anywhere in the AI business then what are you even doing. Anybody can look up oracles financial results and would know how much they have vs how much they would possibly need) bit_user said: However, my point wasn't about risk, but rather that it's a potentially troubling sign that Oracle needed to issue more debt than they might've originally planned. Perhaps the AI bubble is weakening. No spending more money is "inflating the bubble" more. If they succeed or face plant can only be known in the end. Reply
bit_user TerryLaze said: From how I read it they just complain about oracles rating going down and them losing money. Because they issued more debt. TerryLaze said: No spending more money is "inflating the bubble" more. Taking on enough debt that some have demoted their credit rating is one step above "junk" is clearly a sign that they cannot continue their deficit spending. So, it sounds to me like Oracle's spending is about to dry up. Reply
TerryLaze bit_user said: Because they issued more debt. Which is something that they knew would happen but now are trying to weasel out of by claiming unclear text. bit_user said: Taking on enough debt that some have demoted their credit rating is one step above "junk" is clearly a sign that they cannot continue their deficit spending. So, it sounds to me like Oracle's spending is about to dry up. They also can't stop spending, at least depending on how the contract with openAI is, usually there are penalties that are higher than the money saved, so they have to spend as much as they planned to spend no matter what happens to their rating. Reply
bit_user TerryLaze said: Which is something that they knew would happen but now are trying to weasel out of by claiming unclear text. If they knew it would happen, then they wouldn't have bought the bonds, because it had the obvious effect of the bonds getting devalued to less than they sold for. If it were just normal market dynamics, then they wouldn't be filing a lawsuit, either. That would be a waste of even more money. They will have the benefit of the discovery process and their day in court, in order to prove their case. It doesn't matter what you say or think. TerryLaze said: They also can't stop spending, at least depending on how the contract with openAI is, usually there are penalties that are higher than the money saved, No, a big contract always has exit clauses and they're never so big as to make it a suicide pact. A company like Oracle would never enter into a contract that it literally couldn't afford to get out of. Reply
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/shareholders-sue-oracle-over-misleading-statements-related-to-usd300-billion-openai-data-center-build-out-disgruntled-plaintiffs-say-the-company-lied-about-how-much-money-it-needed-to-borrow#main
- https://www.tomshardware.com
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Informational only. No financial advice. Do your own research.