Larry Ellison pledged 413 million Oracle shares to fund the Warner deal as Oracle's CDS hits 322 basis points
Ellison scrapped a $7.5 billion Oracle share sale in September and pledged Oracle, Tesla and SpaceX stock instead to fund his son's Warner deal, just as Oracle's credit spread hit 322 basis points and Skydance took a $1 billion check from Musk. October 28's Investor Day is the first test of whether the founder's leverage matters to the company's.
Vincent Jiang · 2 min read
Larry Ellison had a plan to pay for his son's Warner Bros. Discovery takeover: sell up to 50 million Oracle+0.29% — Oracle, up 0.29 percent today shares, about $7.5 billion at the June price 234. On September 12, with Oracle stock sagging, he canceled the sale and borrowed instead, pledging shares of Oracle, Tesla and SpaceX as loan collateral 234. The deal closed October 6 234. What reads as media-deal gossip is actually a founder staking his family's bet on the price of a stock that is down 62% from its September 2025 peak 234.
The collateral grew exactly as the stock fell
Liens filed in California show Citigroup−1.57% — Citigroup, down 1.57 percent today, HSBC, JPMorgan, UBS and BNP Paribas holding combined claims on 87 million Oracle shares, up from roughly 30 million a year earlier 2. Oracle's proxy puts Ellison's total pledged shares at 413 million as of September 21, versus 346 million a year before 2. Lenders typically advance half the value of a stock like Oracle's; the 87 million shares could support about $5.7 billion 2.
The company balance sheet is levered too
Oracle carries roughly $169 billion of total debt after an S&P downgrade this year, and its $664 billion contract backlog is heavily tied to OpenAI$500B — OpenAI, private, latest valuation $500B 1. The credit market is pricing that risk: Oracle's five-year credit default swap spread hit 322 basis points on Monday, more than double the 144 basis points of January 5. AI-linked CDS trading ran above $9 billion a week in September, versus under $2 billion in July, on $466 billion of AI debt issued this year 5.
Credit markets price Oracle as the second-riskiest AI name after CoreWeave
Data
| Value | |
|---|---|
| CoreWeave | 1,090bp |
| Oracle | 322bp |
| SpaceX | 226bp |
| Meta | 108bp |
| Nvidia | 101bp |
One price feeds both bets
Ellison still owns about 40% of Oracle and has lost roughly $194 billion of net worth, leaving about $182 billion 1. Across the table, his family's debt-laden Skydance+0.39% — Skydance, up 0.39 percent today, carrying nearly $80 billion after the merger, just took a roughly $1 billion equity check from Elon Musk 6. Cheap credit and a high ORCL price hold both structures up.
Oracle's Investor Day at AI World on October 28 is the first scheduled Q&A since the pledging surfaced and CDS printed its new high 7. The question for management is whether the anchor shareholder's collateral math adds forced-seller risk to a stock the bond market already treats as AI's biggest credit worry. Oracle's board says Ellison can repay without touching the pledged stock and that the loans pose no material risk to shareholders; the counterparty to that assurance is the CDS market, and it is not nodding along 25.
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