ORCL Inches Higher After Pricing $20B Equity And Bond Offering: New Shares Priced At Discount To Last Close And 50-Day Average

Oracle will sell 86.2 million shares at $116 a piece, the company announced late on Monday.

• Oracle plans to raise $10 billion each from shares and bonds.
• ORCL stock fell more than 17% in a sharp three-day slide, nearing an 18-month low. 
• Retail sentiment for ORCL was ‘bullish.’

Oracle Corp. (ORCL) released the pricing and details of its $20 billion equity and bond offerings late Monday, offering to sell 86.2 million shares at a discount to the stock’s last closing price and the 50-day moving average.

ORCL inched 0.2% in overnight trading. Shares fell 8.6% in Monday’s regular session after Oracle first announced the offering.

Oracle plans to sell the stock at $116, below the $119.2 level at which ORCL closed on Monday and the $141.25 simple 50-day moving average. The company said net proceeds from the common stock offering will be about $9.9 billion after deducting underwriting discounts and Oracle's estimated offering expenses.

Oracle priced its senior notes at 7% for the 2029 series, 7.45% for 2031, 7.85% for 2033, 8% for 2037, and 8.65% for 2046, with net proceeds expected to be about $10 billion, according to its statement. Both the shares and notes offerings will close on Nov. 4.

Oracle said it will use the proceeds for general corporate purposes, which may include capital expenditures, repayment of indebtedness, future investments or acquisitions, and payment of cash dividends or repurchases of stock by the company.

The company said last week that capital spending would peak this fiscal year and next, while pledging to raise no more than $20 billion in additional AI financing through fiscal 2030.

ORCL stock is down more than 17% after a sharp three-day slide, bringing it close to an 18-month low. 

Oracle’s Financial Position 

Investors are scrutinizing Oracle’s fundraising, much of which relies on debt, as it builds data centers and infrastructure to support new AI computing contracts it has secured.

Oracle’s first-quarter revenue rose 30% to $19.35 billion, exceeding Wall Street projections of $19.14 billion, according to results issued in September.

Oracle booked more than $30 billion in additional AI cloud contracts in the quarter, increasing its remaining performance obligations, or backlog, to $664 billion. During the quarter, the company completed a $20 billion at-the-market equity offering. 

Consequently, Oracle raised its fiscal 2027 adjusted earnings and revenue forecasts and affirmed its forecast of $70 billion in full-year capital spending.

Retail View On ORCL

On Stocktwits, the retail sentiment for ORCL remained ‘bullish’ for a second day, with mixed opinions from retail traders.

“To protect that BBB- rating. They are intentionally diluting shareholders by selling $10 billion in equity because they know they cannot afford to take on pure debt without S&P officially pushing them off the cliff into junk status,” one wrote.

Another said: “$ORCL They announced the exact same information of needing 20B$ Capex last week and the stock rallied to 148. Nothing new but shorts attacking with the help of overall market sell off.”

Year-to-date, ORCL is down 38%.

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