Morgan Stanley Warns Oracle Credit Protection Nearing Record High (yahoo.com) 48
A gauge of risk on Oracle debt "reached a three-year high in November," reports Bloomberg.
"And things are only going to get worse in 2026 unless the database giant is able to assuage investor anxiety about a massive artificial intelligence spending spree, according to Morgan Stanley." A funding gap, swelling balance sheet and obsolescence risk are just some of the hazards Oracle is facing, according to Lindsay Tyler and David Hamburger, credit analysts at the brokerage.
The cost of insuring Oracle's debt against default over the next five years rose to 1.25 percentage point a year on Tuesday, according to ICE Data Services. The price on the five-year credit default swaps is at risk of toppling a record set in 2008 as concerns over the company's borrowing binge to finance its AI ambitions continue to spur heavy hedging by banks and investors, they warned in a note Wednesday. The CDS could break through 1.5 percentage point in the near term and could approach 2 percentage points if communication around its financing strategy remains limited as the new year progresses, the analysts wrote. Oracle CDS hit a record 1.98 percentage point in 2008, ICE Data Services shows...
"Over the past two months, it has become more apparent that reported construction loans in the works, for sites where Oracle is the future tenant, may be an even greater driver of hedging of late and going forward," wrote the analysts... Concerns have also started to weigh on Oracle's stock, which the analysts said may incentivize management to outline a financing plan on the upcoming earnings call...
Thanks to Slashdot reader Bruce66423 for sharing the article.
"And things are only going to get worse in 2026 unless the database giant is able to assuage investor anxiety about a massive artificial intelligence spending spree, according to Morgan Stanley." A funding gap, swelling balance sheet and obsolescence risk are just some of the hazards Oracle is facing, according to Lindsay Tyler and David Hamburger, credit analysts at the brokerage.
The cost of insuring Oracle's debt against default over the next five years rose to 1.25 percentage point a year on Tuesday, according to ICE Data Services. The price on the five-year credit default swaps is at risk of toppling a record set in 2008 as concerns over the company's borrowing binge to finance its AI ambitions continue to spur heavy hedging by banks and investors, they warned in a note Wednesday. The CDS could break through 1.5 percentage point in the near term and could approach 2 percentage points if communication around its financing strategy remains limited as the new year progresses, the analysts wrote. Oracle CDS hit a record 1.98 percentage point in 2008, ICE Data Services shows...
"Over the past two months, it has become more apparent that reported construction loans in the works, for sites where Oracle is the future tenant, may be an even greater driver of hedging of late and going forward," wrote the analysts... Concerns have also started to weigh on Oracle's stock, which the analysts said may incentivize management to outline a financing plan on the upcoming earnings call...
Thanks to Slashdot reader Bruce66423 for sharing the article.
Too big so fail (Score:2)
Re: (Score:3)
Oracle has definitely gone downhill for a long time. They should have been sticking to what they really were good at - databases and tools for accessing them.
The downward slope started somewhere around version 8.1 when they decided to add Java to the database.
Re: (Score:2)
I talked to a DB expert at a really large bank about 15 years ago. Apparently, at that time Oracle was already not "good" at databases.
Re:Too big so fail (Score:4, Insightful)
My experience was like 30 years ago, that's how long ago that they were decent.
Of course any database requires a good DBA and good SQL programmers for optimal results regardless of who has made the database.
Re: (Score:2)
Indeed. Also shows that giants die slowly, unfortunately.
Re: (Score:2)
Just look at IBM, they are still alive. I think that they survives by providing services to banks and some of the Fortune 500 companies.
Microsoft shows all the signs of going the same path. Same with VMware.
Re: Too big so fail (Score:1)
Re: (Score:2)
Well, IBM was basically a zombie 10 years ago. Something will have to stake them to put them out of their misery. Fully agree on Microsoft. Their stuff is only getting worse at this time and was pretty bad before. And their cloud got hacked several times now and had really, really bad vulnerabilities were nobody knows whether they were attacked or not (which makes things worse). They clearly do not have what it takes to survive with the increased need for IT security we have today.
Re: (Score:2)
I think this will turn out to be one giant lawsuit that, even if oracle wins, they'd still have already bet (and lost) the family farm. Blood from a rock.
Re: (Score:2)
Maybe. But above of some level of fail and delusion you do not get access to the good layers anymore. Just look at Trump.
Re: (Score:1)
but Oracle has become buggy and with major behavior changes between minor versions, both in SQL and in configuration, an utter trainwreck my employer had to fight with 12C and beyond
Re: (Score:2)
They were only "decent" then because everyone else sucked at getting a stable db. I tested 4 db in about 1990 and the other 3 worked badly. Oracle's install script had some poor assumptions but once worked around worked as a db. One of the DB got installed and kept getting "internal errors" and support says reinstall will probably fix it, so given we were evaluating it for 50+ installs that lack of understanding was unacceptable.
And unlike banks that fail and take others money with them, Oracle failing s
Re: (Score:2)
Re:Too big so fail (Score:4, Interesting)
I talked to a DB expert at a really large bank about 15 years ago. Apparently, at that time Oracle was already not "good" at databases.
When I was working with Oracle databases the arbitrary limitations and insane behaviors were shocking.
First of all the database itself was unreliable complete with arbitrary crashing.
They couldn't even get basics like NULL handling right.
If you create a table where the clustered index is different from the primary key the system would go haywire and allocate a maximum of one row per page.
Triggers were completely useless.
Stored procedures returning cursors was an exercise in self mortification.
Lack of upserts made it impossible to reliably optimistically predicate changes without changing architecture/schema.
Absurd arbitrary "mutation" constraints due to poor system design.
Shit tools and maddeningly shitty UX. Any more even if you grant open source solutions suck and require way more hardware to accomplish the same tasks it is still way cheaper to buy extra hardware than spring for Oracle licenses.
Re: (Score:2)
Waay back when, I always thought the only 'killer feature' for Oracle DB was RAC - that is, multiple read/write nodes all operating together, and able to co-ordinate writes and JOINs and whatnot. Back when a Sparc10 was a super-powerful workstation, you needed some serious tech to be able to handle big workloads. I never liked the database itself, it always seemed dramatically over complicated and far too rough around the edges.
These days, RAC is not needed much - first of all, we engineer applications diff
Re: (Score:2)
Oracle has definitely gone downhill for a long time. They should have been sticking to what they really were good at - databases and tools for accessing them.
The downward slope started somewhere around version 8.1 when they decided to add Java to the database.
The Oracle codebase is such a unintelligible mess the only way it can be improved is with the assistance of a superhuman AGI.
Re:Too big so fail (Score:5, Insightful)
I thought that what Oracle was really good at was trapping customers into oppressive contracts and using legal action to extract money.
Re: (Score:1)
Should have failed 30 years ago.
Absolutely horrific database, and worse company.
And that's before you get to the Tiny Orange Mushroom sucking CEO.
Hail Mary? (Score:2)
Re: (Score:3)
Oracle was doomed until they bet everything on AI. Knowing Ellison, there’s a chance he might pull it off. Worse case scenario, Microsoft will acquire them.
Jesus wept, can you imagine the unholy abomination that a Microsoft/Oracle hybrid would be? It makes my brain hurt to imagine such a hammerfuck of failure and technological despair.
Re: (Score:2)
Jesus wept, can you imagine the unholy abomination that a Microsoft/Oracle hybrid would be? It makes my brain hurt to imagine such a hammerfuck of failure and technological despair.
Well said! I know you didn't mean to be humorous, but I'm still laughing anyway. And now I'm wracking my brain trying to figure out how to casually work "hammerfuck of failure and technological despair" into a conversation.
Re: (Score:2)
Jesus wept, can you imagine the unholy abomination that a Microsoft/Oracle hybrid would be? It makes my brain hurt to imagine such a hammerfuck of failure and technological despair.
Well said! I know you didn't mean to be humorous, but I'm still laughing anyway. And now I'm wracking my brain trying to figure out how to casually work "hammerfuck of failure and technological despair" into a conversation.
Do you or your associates have to work with Salesforce very often? That may offer you an opportunity or three.
Re: (Score:2)
IANAP and I'm mostly retired, so I'm doubly on the sidelines and don't have a dog in this fight. But I do have a wife who is forced to use Windows - the "hammerfuck" represented by that is about as much as I can handle.
Re: (Score:2)
IANAP and I'm mostly retired, so I'm doubly on the sidelines and don't have a dog in this fight. But I do have a wife who is forced to use Windows - the "hammerfuck" represented by that is about as much as I can handle.
Your wife has my sympathies. Us workers should unite in open rebellion against Microsoft at some point, but the C-suites of the world still seem to put their faith in them.
On the plus side (Score:5, Insightful)
If the AI-idiots at Oracle overdid it and Oracle dies, there is at least one good outcome from the current AI craze.
Re: (Score:3, Insightful)
Re:On the plus side (Score:5, Funny)
Re: (Score:1)
Isn't Oracle's major involvement in AI just being cloud provider for place to run it? The actual AI companies would just move elsewhere, Oracle is 3% of that market.
There are alternatives (Score:2)
Several of the companies I worked for did so around 15 years ago and they still live.
why now? (Score:1)
Pin that pops the bubble? (Score:2)
I wonder if this is a flag that the AI bubble is primed and ready for something small to pop it. Curious if CDSs on other tech giants have similar behavior.
Re: Pin that pops the bubble? (Score:1)
how cool is that dude's name (Score:2)
Re:how cool is that dude's name (Score:4, Funny)
Daughter of Julie Hotdog and Andrew Hoagie.
Where would companies go? Postgres? (Score:2)
I'm not that knowledgeable about database stuff, though I did, in a previous life, work as a contractor at one time or another for Oracle, Informix, and Sybase. (I did backend stuff, meat and potatoes C programming, not database stuff with SQL or anything like that.) I was there when Informix kind of bit the dust and developers were leaving in droves for Oracle. (Sigh, Informix was a good place to work too, but then they got a CEO who screwed things up. Enough digression.)
From what I've read and heard,
Re: (Score:2)
Postgres is very good. Is it "enterprise"? Probably not in the way Oracle is but it can scale vertically and horizontally with replications and shards (citus extension). It's an excellent database that is pleasant and unsurprising to work with and has a lot of useful feature
Re: (Score:2)
Yes, we could only hope Broadcom buys Oracle the DB so we can watch it truly die. :)
Postgres (Pg) is good enough to take over all but probably 1% of what Oracle does (in my experience). That last 1% (where there is peta-bytes of data) could probably be covered too with some rearchitecting. There are at least 2 companies that will commercially support Pg if you need some hand-holding or someone to point a finger at; although I've found the community support (where the actual developers participate) to be goo
Re: (Score:2)
Unless I had a genuine use case Postgres could
Wall Street Oracle CDS monty ;) (Score:3)
CDS on Oracle are not “issued” by Oracle itself; they are private contracts mostly created and traded by large financial institutions that act as protection sellers to investors who want to hedge or speculate on Oracle’s credit risk.
Oracle the database will live on (Score:2)
Not that I particularly care but I'm sure it will bite a lot of companies who'll suddenly wonder why they even needed a commercial database for the workload they used it for. At least there are open source versi
Re: (Score:2)
...but anyone caught on Oracle [DB] if the company collapsed or was sold off is royally fucked.
A migration to Postgresqll is pretty easy for most installs with some modest effort. There is even a tool to help the conversion. Is it a perfect automated conversion? No, but it does 90% plus of the work for you and PgPLSQL is pretty similar to PLSQL. The real tripping points of a conversion are where Oracle doesn't follow ANSI-SQL and you'll have to fix your code to deal with that (I have a good sized list for that and I'm sure it's not complete, ugh!). But hey, even if Oracle died tomorrow, the DB will