Who's The Sucker

Say what you will about Larry Ellison but the man is not a sucker. Earlier this year Oracle was a consensus long and the stock traded over $36. Larry Ellison, the Oracle CEO, thought software stocks were expensive and built up cash. At the time Oracle repurchased virtually none of the their own shares.

Yesterday, Oracle went from hero to goat and the same people who loved Oracle at $36 hate it at $25. In conjunction with earnings Oracle announced a $5 billion repurchase plan in addition to their existing $2 billion authorization, signalling they want to be buyers of the stock at these levels.

On one side of the trade we have the reactive investing public and their reactive money managers. On the other side of the trade we have Oracle headed by self made billionaire Larry Ellison. Who is the smart money?

 

No comments: