Larry Ellison’s borrowing strategy: why the Oracle (NYSE: ORCL) billionaire is using his shares to fund a media deal

Larry Ellison needed money for a big media deal, and he had two ways to get it. He could sell some Oracle stock, or he could borrow against it. In early September he said he might sell up to $7.5 billion of shares, about 50 million, between June and October. He dropped that plan within days.

He chose loans. Oracle’s proxy filing shows he pledged 67 million more shares as collateral for personal loans, worth about $9.2 billion at that day’s $137.10 close. His total pledged stock is now around 413 million shares, roughly 36% of the 1.16 billion he owns.

The loans connect to a deal that is much bigger than his own wallet. The Ellisons have pledged $47 billion in equity toward a takeover of Warner Bros. Discovery worth around $111 billion. Most of that equity is reported to come from Middle Eastern investors.


According to The Wall Street Journal, five banks, including Citigroup, HSBC, JPMorgan, UBS and BNP Paribas, took security interests in 87 million shares. The filings do not reveal the exact amount of money he has borrowed against those shares.

Why is Larry Ellison borrowing against his Oracle shares instead of selling them?

Ellison owns about 40% of Oracle. When someone that large sells, the price can slide, and other investors may read it as the boss losing faith. A loan avoids both problems. It also usually avoids the tax bill that comes with selling shares at a big gain. The cost is interest, and the risk is that the shares stay on the hook until the loan is paid off.

This setup is also unusual for Oracle. The company bars its officers and directors from pledging stock, but the policy has an exception written for Ellison. That exception shows how much weight he carries, since he co-founded the company in 1977 and is still its largest shareholder.

Oracle’s board has addressed the worry directly. It says the pledged shares secure personal term loans for outside business ventures, that none sit in margin accounts, and that it believes he can repay without selling a share. That is the company’s view and the loan terms themselves aren’t public.

What could go wrong, and who should care

If Oracle’s stock falls hard, the shares backing the loans are worth less, and lenders may ask for more collateral or cash. If he couldn’t provide it in time, banks could sell some of the pledged shares to protect themselves. That would add selling pressure at exactly the moment the stock is already weak.

There are two reasons not to panic. First, the board says these aren’t margin accounts, which are the type of loan most associated with sudden forced sales. Term loans can still have top-up rules, but we don’t know the details. Second, the cushion looks large.

Oracle was around $137 when the latest pledge was valued. At that price, 413 million shares are worth roughly $54 billion, while the loan amounts are unknown and banks normally lend only a fraction of collateral value.