Just before Christmas, Larry Ellison (pictured above) rescued his son.
Warner Bros. Discovery‘s board had rejected David Ellison‘s Paramount Skydance in favor of a Netflix offer, branding Paramount’s financing “illusory.” The Oracle founder — then among the three richest people alive — responded with an irrevocable guarantee of $40.4 billion in equity, plus a promise not to revoke the family trust or shift its assets while the deal remained pending.
Paramount went further, publishing records to prove the trust holds 1.16 billion Oracle shares. Warner’s board ultimately reversed course, the offer bringing the enterprise value of the transaction above $110 billion in total value, and the acquisition now stands poised to close as soon as this month.
It reads as a heartwarming tale of paternal devotion. Unless you own Oracle stock.
NLPC does, and we have a shareholder proposal pending at the company. From where we sit, the founder’s Hollywood adventure looks less like devotion and more like a transfer of risk onto Oracle’s other owners.
Start with how the guarantee gets funded. Forbes crunched the numbers in February: Ellison holds under $10 billion in cash, about $15 billion in Tesla stock, and has sold a mere $4.7 billion of Oracle shares since the turn of the century.
His trust’s equity commitment to the Warner takeover reached $45.7 billion. The one asset large enough to bridge that gap appears to be his 1.16 billion Oracle shares, worth about $164 billion when Forbes ran its analysis.
He has form here. A September 2025 disclosure revealed 346 million Oracle shares pledged as collateral for personal business ventures outside the company — a block worth north of $100 billion at the time.
Then Oracle’s stock declined by more than half. The pledged shares lost half their value by late February, and the price has now fallen more than 50 percent from last year’s peak.
Falling collateral can trigger margin spirals. Lenders demand more stock or force sales; sales depress the price; the cycle feeds itself — with outside shareholders along for the ride.
The timing could not be worse for Oracle. The company ended May with about $130 billion in debt, negative free cash flow of $23.7 billion, and capital spending up 162 percent as it races to build data centers for OpenAI and other artificial intelligence customers.
Wall Street frets that some of those customers lack the resources to fulfill their commitments — a grim prospect for a business that borrowed on this scale to serve them. Oracle’s own annual report, released in June, carried unusual warnings about the risks in its infrastructure business.
Management plans to raise another $40 billion this fiscal year, including a $20 billion share sale that dilutes every existing holder. Picture the split screen: a firm issuing equity at depressed prices while its founder-chairman mortgages his own block to bankroll a media empire.
June brought Oracle’s worst week on Wall Street since 2001 — a 19 percent plunge — along with word that headcount shrank 13 percent over the fiscal year. Ellison, the chief technology officer and owner of more than 40 percent of its shares, skipped the earnings call.
Two co-chief executives new to their roles and a finance chief hired weeks earlier fielded analysts’ questions instead. The man whose name is synonymous with Oracle was busy buying Warner Bros.
And what a purchase it is. The Wall Street Journal reports the combined company will stagger out of the gate under almost $80 billion in debt, about 6.5 times annual earnings — leverage that MoffettNathanson analysts labeled “staggering.”
The merged giant must service that burden from declining television networks while promising no asset sales and no cuts to content spending. If those promises break, or if streaming synergies fall short, the guarantee behind the deal traces straight back to a mountain of Oracle stock.
To be clear, Oracle the corporation owes nothing on this transaction. The harm to shareholders arrives through side doors: the overhang from potential share sales, margin exposure on pledged holdings, dilution timed against insider borrowing, and an absentee chairman during its roughest patch in decades.
None of it is illegal. All of it deserves sunlight.
Before Oracle’s annual meeting this fall, investors should demand to know how the Warner equity was funded, whether the pledged share count has grown since September, and what limits the board enforces on pledging by its own insiders — starting with the one who controls two-fifths of the company.
Larry Ellison spent five decades building one of America’s great enterprises, and his fortune is his to spend on his son’s dreams. What he may not do is make Oracle’s shareholders unwitting co-signers.
