Oracle's stock has fallen sharply, with some reports indicating a 33% cratering from its September peak, as investors react to news of the company's aggressive, debt-fueled expansion into AI and cloud infrastructure. The tech giant has taken on approximately $56 billion in new financing, consisting of $38 billion in loans and $18 billion in bond sales, to fund its growth and a significant commitment to OpenAI. This borrowing spree has raised alarms on Wall Street, as the company's trailing twelve-month free cash flow has turned deeply negative, reaching –$5.9 billion, its lowest point in 23 years. Consequently, Oracle's debt-to-equity ratio has surged to an unusually high 520%. Analysts are expressing caution, with some downgrading the company's debt rating, citing the rising financial risk, potential liquidity issues, and the strain that heavy capital expenditures are putting on the company's finances.
Oracle Stock Plummets as Company Takes on $56 Billion in Debt Amid Negative Cash Flow
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