Oracle shares rebound 6% following $20 billion debt-equity raise
Oracle's stock climbed 6% to $125.81 a session after the company finalized a $20 billion combined offering of shares and bonds, while CoreWeave advanced 7% and Microsoft added 2% in the same trading day.
The gain claws back some of the losses from the prior day, when Oracle finished at $119.22, its lowest close in four months. Even after the bounce, the shares remain 35% lower since the start of the year.
Oracle finalized pricing on the $20 billion capital raise late on November 2, divided equally between common equity and senior notes. The company placed 86.2 million shares at $116 apiece, a price beneath both the previous closing level and its 50-day moving average near $141.25. The bonds carry interest coupons reaching as high as 8.65%.
This capital raise aligns with guidance Oracle gave on June 10, when it signaled it would secure approximately $40 billion in fiscal 2027 using a mix of debt and equity. Beyond that point, the firm plans to curb additional capital-markets activity through fiscal 2030, aside from refinancing needs.
Rob Oliver, an analyst at Baird, remarked that the transaction appeared to match precisely what the company had signaled in advance, adding that the freshly issued shares represent only a minor addition to Oracle’s overall share count. As of Monday’s close, Oracle shares traded at a multiple of 14 times projected earnings, well under its historical five-year norm of 21 times. Oracle’s remaining performance obligations totaled $664 billion, based on figures the company disclosed on September 10.
Interest costs at Oracle climbed 55% from a year earlier to reach $1.4 billion in the fiscal first quarter, while free cash flow registered a shortfall of $5.4 billion. Management has set goals of generating at least $225 billion in revenue by fiscal 2030 and producing at least $30 billion in free cash flow by fiscal 2029.
CoreWeave’s steeper 7% rally, which outpaced gains at both Oracle and Microsoft, points to investors reacting more broadly to enthusiasm over AI cloud infrastructure rather than treating Oracle’s move as an isolated event.
Why it matters for markets: The Oracle stock bond sale has implications for corporate bond issuance volumes and borrowing costs across technology firms, while the share-price response offers a gauge of investor willingness to fund debt-backed AI infrastructure buildouts — a dynamic with relevance for US Treasuries, corporate credit spreads and the Nasdaq 100.
Source: Yahoo Finance