A quarterly report is where a company puts the things it has to say rather than the things it wants to say. Oracle filed its own on Friday, and inside a section headed Insider Trading Arrangements sat a paragraph about its founder. Lawrence J. Ellison, executive chair and chief technology officer, had adopted a trading plan on 22 June that let him sell up to 50 million Oracle shares before it lapsed on 24 October. Outlets put the value of that block at about $7.5 billion at the price at the time.
A day later Oracle issued a press release saying the plan had been cancelled, that no stock had been sold under it, and that Ellison has no other plans to sell any of his Oracle stock. It gave no reason.
What the plan was for in the first place
The instrument is a Rule 10b5-1 plan, and the whole point of one is to make a sale boring. An executive who is not holding inside information sets a schedule in advance, and the trades then execute on their own, including in stretches when selling at your own discretion would raise eyebrows. The rule dates from 2000, and the American regulator tightened what has to be disclosed about these plans in 2022. Oracle says Ellison's plan was precleared under its own insider-trading policy, and that any actual sales would have shown up in later filings.
So nothing improper happened here, and the only reason the plan surfaced at all is that the rules made Oracle print it. What the rules cannot control is the week it printed in.
The week it landed in
Oracle had reported shrinking gross margins the day before, its shares fell 1.7% on the Friday, and in the same week it raised the cost of its job cuts to $2.8 billion. The stock has lost more than a fifth of its value this year on nerves about how much the company is spending to build artificial-intelligence capacity, and about the debt it has taken on to do it. Ellison controls about 40% of Oracle and has held on to most of what he founded in 1977.
Set against that, the underlying quarter was strong: Oracle booked more than $30 billion of new AI cloud contracts, raised its earnings forecast for next year and kept its spending target intact.
Europe would have handled the whole episode differently, and mostly by not handling it. Under the market abuse rules there, managers simply may not deal in the 30 days before results, and what gets published is completed transactions rather than intentions. A plan that never traded would have left no trace at all.
