Oracle co-founder, Larry Ellison, loses $18.7B in 1 day
Billionaire co-founder of software giant, Oracle- Larry Ellison has seen his net worth slump by a jaw-gaping $18.73 billion in one day after company shares plunged by about 12%.
Based on data tracked by Forbes, Ellison’s net worth dropped from about $159 billion to $140.6 billion. The current share price of Oracle stands at $109.61 today from its initial $126.71 at the start of market trade yesterday.
Oracle shares fell to the ground by 12% on Tuesday, their steepest drop in over two decades, after the software maker reported disappointing revenue and issued weaker-than-expected guidance.
The last time the stock had a steeper percentage drop was a 15% decline in March 2002, at the tail end of the dot-com bust.
What happened to Oracle shares?
While its earnings exceeded expectations, the firm reported fiscal first-quarter revenue of $12.45 billion, falling short of the $12.47 billion analyst estimate.
For the upcoming quarter, Oracle forecasted revenue growth of 5% to 7%, which was below the 8% average analyst estimate.
CNBC reported that Oracle had been emphasizing the integration of artificial intelligence into its business operations, adding AI features to its Fusion Cloud and Human Capital Management Software.
However, analysts noted that investors had higher expectations for AI and cloud-related growth.
Oracle CEO Safra Catz mentioned challenges at the company’s Cerner unit, which it acquired for $28.2 billion in 2021.
The unit is undergoing a rapid transition to the cloud, causing temporary headwinds to its growth rate.
Revenue in Oracle’s cloud services and license support segment rose 13% from a year earlier, topping StreetAccount’s consensus of $9.44 billion. But sales in the cloud license and on-premises license segment fell 10% to $809 million, missing estimates.
Despite Tuesday’s stock decline, Oracle shares are up by 34% year-to-date, outperforming the S&P 500’s 16% increase.
More about Larry Ellison
The fourth richest man in the world, following closely behind Jeff Bezos-Larry Ellison, who owns about 35% of Oracle, relinquished the CEO role in 2014 after leading the company for 37 years.
He has played a pivotal role in Oracle’s growth through acquisitions, including the purchase of electronic health records company Cerner for $28.3 billion in 2021.
Ellison now resides on the Hawaiian island of Lanai, which he largely acquired for $300 million in 2012. He also retains ownership of approximately 15 million shares in Tesla, where he sat on the board from December 2018 to August 2022.
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