Oracle shares dropped on Monday after the company said that co-founder and chief technology officer Larry Ellison canceled a plan to sell some of his shares.
Over the weekend, Oracle said that Ellison, who is among the world’s richest people, ended a 10b5-1 trading plan he set up a few months ago. These plans let company insiders set up automatic trades in advance to avoid accusations of trading on confidential information. Oracle said Ellison did not sell any shares before canceling the plan and that he does not plan to sell Oracle stock right now.
This update came after Oracle had previously announced that Ellison planned to sell up to 50 million Oracle shares, worth about $7.5 billion. He set up the plan in June, and it was supposed to end in late October. SEC rules do not require insiders to announce the cancellation of such plans right away, but the change must appear in the company’s next regular filing.
The change surprised investors and caused Oracle shares to fall nearly 4% in premarket trading on Monday, while the overall market was mixed or lower.
Most of Ellison’s wealth is still invested in Oracle, the company he co-founded in 1977. He owns over 40% of Oracle and has been key in shifting the company from a traditional database business to a major player in cloud computing. Although Oracle has gained from the recent surge in AI investments, worries about its large debt have hurt the stock this year, even as the overall market has done well.
Oracle revealed Ellison’s original trading plan in a quarterly filing with regulators last week. Strong revenue from its cloud business has helped the stock lately, but it is still uncertain if this growth will be enough to calm investors’ worries in the long run.
