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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-

#171

Post by pid-1 »

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?

Hold short term debt (e.g money market funds or SOFR ETFs). Then you will have cash in hand if either stocks fall or yelds raise.

Never buy derivatives as a non institutional investor.

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

#172

Post by monocasa »

throwa356262 wrote: post #22
monocasa wrote: post #13

Earlier quoted context omitted.

I think the hyperscalers are smart enough to not let Oracle be their landlord.

Are they? Anthropic is renting compute from a competitor, that also is known for their blackhat business practices.

Anthropic isn't a hyperscaler, but instead a hyperscaler customer.

And I've seen first hand hyperscalers go to extremely large lengths to eradicate any use of Oracle (which mainly comes in these days through their acquisitions).

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

#173

Post by [deleted] »

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

[deleted]

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

#174

Post by dragonwriter »

bhouston wrote: post #159
tmp10423288442 wrote: post #151

Earlier quoted context omitted.

TikTok for US users

When your customers are government mandated, are they really customers or hostages?

Uh, while the sale to the Oracle-led group was government mandated, the use of Oracle Cloud for hosting by the new US TikTok is just self-dealing by the new ownership.

Of course, when your “customers” are just self-dealing, that’s also not a great sign.

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

#175

Post by dmix »

UltraSane wrote: post #98
LaurensBER wrote: post #38

Earlier quoted context omitted.

When we tried to do a pilot with their cloud we couldn't even sign-up. None of the corporate credit cards were accepted. In addition to that the form basically only worked in Edge. We emailed support, they changed something on the backend. It still did not work. We gave up. In retrospective that was a very clear warning sign that their priorities were misguided. I'm glad we did not waste any further time and effort o…

That is crazy. One of the main rules of business is to always make it as easy as possible for customers to give you money.

Enterprise companies typically don’t just add credit card forms, they push you through a sales process and don’t care much for small accounts.

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

#177

Post by lelanthran »

echelon wrote: post #147
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…

Everyone in the tech and media world is dead set on this being a bubble. Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer. Teams can and will shrink. Look at all the production and advertising companies switching over to Seedance. I know ad firms bidding 1/4th their typical contract price (pharma, P&G, etc.) and winning contract after contract. This isn't dotcom "dark…

This:

> Everyone in the tech and media world is dead set on this being a bubble.

is completely orthogonal to this:

> Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer.

The industry being in a bubble or not is irrelevant to the tech being good or bad. The dot-com bubble popped (and was a bubble) even while the tech was fit for purpose.

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

#178

Post by quickthrowman »

s1artibartfast wrote: post #108
lelanthran wrote: post #57

Earlier quoted context omitted.

> They aren't finding AI to be have less ROI than before - they are requiring higher ROI than before, because there is less money remaining. What ROI? There was no return, and there currently isn't any return on investment, because those companies did not exit yet! 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.

ROI on bank loans to Oracle and corporate bonds. Those will have interest rates and returns. If Oracle is highly leveraged or betting the farm on AI, then their credit worthiness goes down. Alternatively, if money floating around to make loans is drying up, companies have to offer better terms to attract the dwindling supply

> ROI on bank loans to Oracle and corporate bonds. Those will have interest rates and returns.

Those are intrinsically linked to ORCL equity. ORCL needs an ROI to service their debt.

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

#179

Post by nsagent »

arielcostas wrote: post #149
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?

Wouldn't it be wiser to get out of the market into fixed rate assets like government bonds? Maybe have some into puts on SPY (or QQQ since tech would probably have bigger losses) too, but mainly getting out of long positions on what seems a really overvalued stock market

  Wouldn't it be wiser to get out of the market into fixed rate assets like government bonds?
I did that earlier this year ahead of the April earnings reports. I was a bit too early to the punch, but I prefer that versus being too late.

I just hope the companies aren't considered too big to fail. Bailing them out would be a bad idea.

https://www.openmarketsinstitute.org/publications/no-bailout...

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

#180

Post by ericmay »

csoups14 wrote: post #163
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 individual investors are buying shares and getting blown up, that’s their problem. Invest and due your own research. This is simply absurd. Of the investment banks that helped SpaceX IPO, Goldman Sachs has their price target at $205 (139x implied price to sales), JP Morgan at $225 (152x implied P/S), Deutsche Bank at $255 (173x implied P/S), Morgan Stanley at $300 (203x implied P/S), and Raymond James at $800 (5…

> It's the 1920s all over again; publicly pump and privately sell into the demand you're creating.

It's not the 1920s all over again.

> Of the investment banks that helped SpaceX IPO, Goldman Sachs has their price target at $205 (139x implied price to sales), JP Morgan at $225 (152x implied P/S), Deutsche Bank at $255 (173x implied P/S), Morgan Stanley at $300 (203x implied P/S), and Raymond James at $800 (542x implied P/S). ... I'm guessing you're perfectly fine with this behavior from the largest market participants?

Who do those investment banks sell to? How familiar are you with, for example, Goldman Sachs finding buyers for SpaceX shares? The minimum account requirement at Goldman last I checked was something like $10mm - do you really care if such investors are buying shares in overvalued companies or, like me, declining to purchase?

You are just throwing things around and not providing a coherent argument. Everyday investors don't have to buy these shares. They can continue to follow industry standard advice to buy total market index funds, or target date retirement funds or whatever. Investment banks sell to high net worth individuals who are by definition sophisticated investors - they know and accept the risk of such offerings. So no I don't care even a tiny bit if a Morgan Stanley client decides to buy what you consider to be overpriced shares in a "pump-and-dump" scheme based on your own certainly flawed and unsophisticated valuation of SpaceX or any other company.

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