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S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

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Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#131

Post by ericmay »

ceejayoz wrote: post #103
ericmay wrote: post #97

Earlier quoted context omitted.

> The exit plan is to offload overpriced shares, that they paid billions for, onto the public market. If they don't IPO, those investors get nothing. I keep seeing these unsubstantiated claims. They’re out to get us and just pump and dump on public markets! Yet, before they IPO they have to go around and do what? Who sets the IPO price? Who buys the shares? If the shares tank, the valuation of the company goes down a…

> If the shares tank, the valuation of the company goes down and locked up shares lose value. "Oh no, my $10B became $5B!" They'll still be happy. > If individual investors are buying shares and getting blown up, that’s their problem. Having the general populace fleeced by bad actors is everyone's problem, eventually.

The flaw in your thinking here is that you’re assuming these greedy people that you are creating in your head would prefer to lose half the value of the shares instead of doubling them. The entire proposition that you are putting forth has no real basis in reality, and doesn’t even match the expected behaviors of your trope of strawman investors.

> Having the general populace fleeced by bad actors is everyone's problem, eventually.

Sure. Creating false narratives and parroting unsubstantiated misinformation and fear mongering is everyone’s problem too.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#132

Post by bpavuk »

lelanthran wrote: post #71
boron1006 wrote: post #51

Earlier quoted context omitted.

I think anthropic with its enterprise strategy and google with its integration in everything have a bit of a moat. But I switched from ChatGPT to Claude 3 months ago because my account was down for like 6 hours. I haven’t used it since. It’s too easy to switch away from chatbots on a whim. There is no moat for that.

> I think anthropic with its enterprise strategy and google with its integration in everything have a bit of a moat. But... Anthropic doesn't have a moat. It's clear at this point that SOTA models are not a moat, and Opus 4.6-level (or GLM 5.2) is sufficient. Google, though... they own the entire vertical, from the semiconductors to the end-user software. They may have a moat.

obligatory correction: the semiconductor layer is still owned by TSMC and Samsung. Google sketches chip designs for them to implement - that's the lowest layer they control. I am not denying that this is impressive.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#133

Post by Maxatar »

Ancalagon wrote: post #89
cmiles8 wrote: post #31

Market signals on an impending AI bust are broader than just Oracle’s woes. For example, Amazon just had a challenging bond offering where the market is clearly starting to seriously question the ROI on all this money being pumped into AI buildout. That does not bode well at all for AI-only companies without broader cash flow from other businesses. And when the cash dries up this whole thing comes crashing down like…

And none of the major model makers (not counting SpaceX) have IPO'd yet

Is Gemini really that unpopular?

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#134

Post by bsimpson »

someuser54541 wrote: post #117
lelanthran wrote: post #88

Earlier quoted context omitted.

> Market signals on an impending AI bust are broader than just Oracle’s woes. It's worse than that - I believe that Oracle is one of the (many) companies right now that, if their AI experimentation fails, will stop the music, and everyone will be running for a chair. Oracle is one of a few foundational components in the circular-investing group of AI companies. If they fail to make their commitments they're the first…

What's the best way to hedge against this, considering many of us have significant savings in the market? A few puts on SPY dated a year or two out?

It's tempting to sell a bunch, but then you've got cash. What do you do with cash when the government keeps printing money and assets are all overpriced?

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#135

Post by semiquaver »

cmiles8 wrote: post #31

Market signals on an impending AI bust are broader than just Oracle’s woes. For example, Amazon just had a challenging bond offering where the market is clearly starting to seriously question the ROI on all this money being pumped into AI buildout. That does not bode well at all for AI-only companies without broader cash flow from other businesses. And when the cash dries up this whole thing comes crashing down like…

Nothing says “full of shit” like someone saying “market is signaling an impending X”. Why not make a huge levered bet and get wildly rich if you think so?

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#136

Post by cmiles8 »

someuser54541 wrote: post #117
lelanthran wrote: post #88

Earlier quoted context omitted.

> Market signals on an impending AI bust are broader than just Oracle’s woes. It's worse than that - I believe that Oracle is one of the (many) companies right now that, if their AI experimentation fails, will stop the music, and everyone will be running for a chair. Oracle is one of a few foundational components in the circular-investing group of AI companies. If they fail to make their commitments they're the first…

What's the best way to hedge against this, considering many of us have significant savings in the market? A few puts on SPY dated a year or two out?

Stay well diversified, keep investing each month, and take a nap.

There are almost surely severe bumps ahead for the AI space and that will likely spill over into the broader market. But unless you’re retiring in the next few years don’t worry about it. You can’t time the ups and downs and the only proven strategy is to just keep investing in a broad indexed portfolio and just ride out. You’ll take a short term hit but also end up buying on the dip because you don’t stop investing.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#138

Post by tptacek »

cmiles8 wrote: post #31

Market signals on an impending AI bust are broader than just Oracle’s woes. For example, Amazon just had a challenging bond offering where the market is clearly starting to seriously question the ROI on all this money being pumped into AI buildout. That does not bode well at all for AI-only companies without broader cash flow from other businesses. And when the cash dries up this whole thing comes crashing down like…

This is a pretty Oracle-specific situation, isn't it? They bet the company on an AI infrastructure buildout and levered hard to do it. Google, Amazon, and Microsoft aren't in comparable situations. Oracle is transforming itself into a value-added CoreWeave (not just in terms of product packaging but also the financial structure of the company), in a way the other hyperscalers aren't.

This story has been playing out for years now, and reads to me like the market simply recognizing that Oracle is not in the same business as it once was. It could succeed, wildly, at this new thing, but its risk isn't going to be valued based on the business it was 10 years ago.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#139

Post by moduspol »

someuser54541 wrote: post #117
lelanthran wrote: post #88

Earlier quoted context omitted.

> Market signals on an impending AI bust are broader than just Oracle’s woes. It's worse than that - I believe that Oracle is one of the (many) companies right now that, if their AI experimentation fails, will stop the music, and everyone will be running for a chair. Oracle is one of a few foundational components in the circular-investing group of AI companies. If they fail to make their commitments they're the first…

What's the best way to hedge against this, considering many of us have significant savings in the market? A few puts on SPY dated a year or two out?

I thought that a year or two ago. Thankfully I did not. I have no idea how long the music will keep playing.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#140

Post by sitzkrieg »

gruez wrote: post #128
someuser54541 wrote: post #117

Earlier quoted context omitted.

What's the best way to hedge against this, considering many of us have significant savings in the market? A few puts on SPY dated a year or two out?

>A few puts on SPY dated a year or two out? You think the hedge funds selling SPY options don't have this priced in already? Of course, you can still make money on this bet, just like you can win money at a roulette table, but unless you think have some special insight that hedge/quant funds don't have, buying options should be negative EV.

agree, mostly true. always better to find a credit spread for your desired exposure
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