Paramount has upped the ante in its hostile takeover bid for Warner Bros. Discovery, announcing Monday that Larry Ellison will personally guarantee the tens of billions of dollars he is putting up to bankroll the transaction. The Ellisons will also let shareholders peer into the finances of their family trust.
Well of course it’s debt, but the debt is guaranteed by Ellison’s personal Oracle stock. Which means that:
One - if the new Paramount/WB gets in to trouble (always a possibility with any media company) He might be required to sell chunks of his Oracle stock which would lower their value getting him in a destructive spiral of having to sell off increasing amounts Oracle stock at increasing lower values just to cover his personal loan. Which would leave Oracle open to a stock holders lawsuit too.
Or (and I think this is the much likelier scenario) - There’s a AI stock crash and now David Ellison and the new Paramount/WB is left holding the bag for a shit ton of Oracle stock which is now worthless and are scrambling to pay stockholders.
Either way I’d expect a suit from anyone holding Oracle stock pretty soon.
Well of course it’s debt, but the debt is guaranteed by Ellison’s personal Oracle stock. Which means that:
One - if the new Paramount/WB gets in to trouble (always a possibility with any media company) He might be required to sell chunks of his Oracle stock which would lower their value getting him in a destructive spiral of having to sell off increasing amounts Oracle stock at increasing lower values just to cover his personal loan. Which would leave Oracle open to a stock holders lawsuit too.
Or (and I think this is the much likelier scenario) - There’s a AI stock crash and now David Ellison and the new Paramount/WB is left holding the bag for a shit ton of Oracle stock which is now worthless and are scrambling to pay stockholders.
Either way I’d expect a suit from anyone holding Oracle stock pretty soon.