Just three months after Larry Ellison briefly became the richest person in the world, his fortune took a massive hit. Oracle’s stock dropped by 11% on Thursday, which instantly cut his net worth by almost $25 billion, Bloomberg reported. The fall came after Oracle reported its latest earnings, showing that the company is spending heavily on building new AI data centres. Investors are worried that the company is pouring in money faster than it is earning it back, and that concern pushed Ellison, now 81, from second to third place on Bloomberg’s list of the world’s richest.
Larry Ellison loses nearly $25 billion
Bloomberg’s wealth index shows he has around $34.8 billion in cash or cash-like assets, money largely earned from years of selling Oracle stock. However, a portion of that money is sitting in real estate and art, which cannot be turned into cash immediately. As of September 19, Ellison had pledged about 30% of his Oracle stock as collateral for personal loans, which is 25% more than the amount he had pledged the year before. Even after Thursday’s stock slide, his Oracle stake is still worth nearly $203 billion. While he has been selling shares consistently for decades, he hasn’t sold more than $1 billion in any single year since 2010.
The timing of this loss is complicated for Ellison as well. The Tech boss recently agreed to financially support his son David’s $108 billion hostile bid for Warner Bros. Discovery. David’s company, Paramount Skydance, lost to Netflix earlier this year when both were trying to buy the media giant behind Warner Bros., HBO and CNN. Now, Paramount Skydance launchedbid with a fresh $30-per-share all-cash offer. The bid includes $41 billion in new equity backed by the Ellison family and RedBird Capital Partners. Paramount has already hinted that $30 is not its final offer, which means a long and intense battle with Netflix could be ahead.
Oracle’s AI spending
Earlier this year, Oracle signed a $300 billion compute deal with OpenAI, and the two are also partners on the $500 billion Stargate data centre project. Oracle spent $12 billion last quarter alone. The cost of insuring Oracle’s debt has jumped to its highest level in more than two years, and Morgan Stanley believes Oracle’s net adjusted debt, currently around $100 billion, could almost triple by the 2028 fiscal year.
In September, Oracle’s stock had skyrocketed by 36% in a single day after the company reported strong earnings. That surge, Oracle’s biggest percentage rise since 1992, added $89 billion to Ellison’s wealth, marking the largest one-day gain ever recorded by Bloomberg’s wealth index. But since Oracle’s shares have fallen roughly 40%.
Even with this steep drop, Ellison remains nearly $95 billion richer than he was at the same time last year. His fortune may have dipped sharply this week, but he is still one of the wealthiest people on the planet.