Larry Ellison’s net worth has dropped $66 billion this year to $181 billion, according to the Bloomberg Billionaire Index.
The latest injury to his financials is the chance that Oracle (NASDAQ: ORCL), the company he founded, will need to provide $7 billion in collateral for a data center
This money is part of a deal with the Public Service Commission of Wisconsin, which is meant, among other things, to protect residents from electricity rate increases. Upon hearing the decision, Oracle released a statement that said, “committed to providing the financial guarantees needed to ensure there is no risk to Wisconsin ratepayers”. The fight now goes to court.
The problem comes with consequences when added to Oracle’s other credit problems, a balance sheet that probably does not support them, and modest earnings. Bloomberg reports “Investor focus should shift to any changes by Moody’s Ratings, which has a Baa2 rating on the firm with a negative outlook, as Oracle continues its spending spree, according to Morgan Stanley credit analyst Lindsay Tyler.” The string of problems is ugly enough to take Oracle’s stock from $240 a share at the start of June to $126. Ellison owns 41% of Oracle.