"They are stretching their balance sheet about as far as they can, their free cash flow is negative and their balance sheet is highly levered,"
"Their neck is sticking out."
"It won't matter as much as the overarching story of customer concentration, how are they financing all this?"
"They're going to be free cash flow negative for the next couple of years during the data center build out. So there's a lot of question marks surrounding that."
Oracle shares surged in September on optimism about cloud growth but have fallen about 33% since Sept. 10. Investors are concerned about heavy capital expenditures, tens of billions of dollars of recent bond sales, and a highly levered balance sheet with negative free cash flow during a large data-center build-out. The cost of protecting Oracle's debt has reached levels not seen since March 2009. Remaining performance obligations are projected at about $520 billion and the company's backlog is expected to grow. Questions persist around customer concentration, financing strategies, and near-term cash-flow pressures ahead of the upcoming quarterly earnings report.
Read at Fortune
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