Oracle stock plummeted 11%, wiping off $25 billion from Larry Ellison’s net worth. The plunge came after the company posted its latest earnings report, in which significant spending on new AI data centers was noted.
Investors are concerned that the company is depleting its cash much faster than it can recover. The sharp reaction pushed the 81-year-old tech leader to drop from second to third position on Bloomberg’s list of the world’s richest people.
According to Bloomberg, Ellison has about $34.8 billion in cash or easily accessible securities. The rest of his wealth is bound up in real estate and art. At the end of September, Ellison had pledged about 30% of his Oracle shares as collateral for personal loans, up from about 25% percent a year ago.
Despite the recent Oracle stock tumble, his stake is still worth close to $203 billion. The billionaire has never sold more than $1 billion of his holdings in any year since 2010.
The timing is especially sensitive, as Ellison recently agreed to financially support his son, David, in his $108 billion hostile takeover bid for Warner Bros. Discovery. Paramount Skydance, which is led by David Ellison, has offered $30 per share, cash-backed by the Ellison family and RedBird Capital Partners.
Paramount has hinted that $30 might not be the final price, setting the stage for a tough battle ahead, especially given Netflix's interest in the media giant earlier this year.
Oracle’s aggressive push into AI is at the heart of investor concerns. The company inked a $300 billion compute deal with OpenAI and is partnering on the $500 billion Stargate data centre project. Oracle shelled out $12 billion in the most recent quarter alone.
Analysts say Oracle’s net adjusted debt, currently around $100 billion, could nearly triple by 2028 if the company keeps up the pace.
Even with this week’s setback, Ellison remains nearly $95 billion richer than he was a year ago, a testament to the incredible scale of his long-term wealth.