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Oracle Files to Sell $20 Billion in Stock and Bonds for AI Buildout
Oracle files to sell $20 billion in stock and bonds to fund its AI buildout, and its shares fell more than 4% Monday.
Key points
- Oracle will sell $10 billion in common stock and $10 billion in senior notes, according to SEC filings.
- Oracle shares fell more than 4% on Monday, after bouncing following last Wednesday's investor day.
- Oracle's five-year credit default swap spread sits at 296, up 270% in one year.
Why it matters. Investor concern over the large debt being taken on to fund AI infrastructure is weighing on Oracle's stock and bonds, and S&P downgraded it to BBB- in July, one rating level above high yield.
Oracle filed plans on Monday to sell $20 billion in stock and bonds, namely $10 billion in common stock and $10 billion in senior notes, according to filings with the Securities and Exchange Commission. The fundraising was first outlined at an investor day last week, yet shares tumbled more than 4% on Monday. Oracle said the proceeds may go to capital expenditures, debt repayments and future investments.
Latest updates
Oracle Files to Sell $20 Billion in Stock and Bonds for AI Buildout
Oracle filed plans on Monday to issue new stock and more debt to finance its artificial intelligence buildout. The company will sell $10 billion in common stock and $10 billion in senior notes, according to filings with the Securities and Exchange Commission. The total offering amounts to $20 billion. Oracle is described as a hyperscaler, a term for large cloud operators that run data-center capacity at scale. The plan reflects the heavy capital spending that major technology companies are making on AI infrastructure. The filings are preliminary plans, and the terms of the final sale have not been reported in the snippet.