We’ve all heard of the iconic and profound uber billionaire investor Warren Buffett. His legendary tactics of buying the good stuff (Coca-Cola, Procter and Gamble, American Express) has allowed his wealth to ever grow. His nickname is the Oracle of Omaha. Let’s take a look at a lesser known billionaire. His name is Larry Ellison and he is the Oracle of Oracle!
In the 1970s he worked for a company called Ampex. While at Ampex one of his projects was a database for the CIA which he called Oracle. In 1977, he founded Software Development Labs (SDL). In 1979, the company was renamed Relational Software and then later renamed Oracle after the flagship product the Oracle database. Early on, Oracle ran into some rocky financial times, their financial model was extremely flawed. Oracle had an “up-front” marketing strategy, in which sales people insisted that potential customers buy the largest amount of software all at once. The sales people then booked the value of future license sales for the current quarter; this allowed the sales employees to increase their bonuses in the quarter. Oracle eventually had to restate their earnings twice and also had to settle out of court with a couple of class action suits. Ellison would later say that they had made “an incredible business mistake.”
Once Oracle’s top rivals (Sybase and Informix) were defeated because of bad mergers and faulty business plans, they enjoyed years of dominance until the rise of the Microsoft SQL server in the late 90s. In the latest year, Oracle had a net income of $8.5 Billion.
Larry Ellison retains a 21% stake in Oracle. That gives him 1,105,234,580 shares. If you do the math and the current price of Oracle is $27.50, you’re looking at stock worth over $28 Billion. It has also been as high as $34 in the recent months. He’s not a household name, but he is worth about $36 Billion. Currently, he is the 5th richest person in the world. So next time you hear the Oracle of Omaha, remember there’s another oracle and he was the founder of Oracle!
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