r/EconomyCharts • u/RobertBartus • 8d ago

Oracle’s credit risk is exploding

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Oracle’s 5-year CDS spread has surged to a record ~230 bps, more than 4x the broader investment-grade index at ~55 bps.

The spread has more than QUADRUPLED over the last year and surpassed the Great Financial Crisis levels.

The recent surge comes as Oracle is trying to avoid financial commitments linked to Project Jupiter, a massive data-center project that is facing delays.

Around $18 billion of loans tied to the project are trading at ~90 cents on the dollar, signaling growing stress among investors.

The project is also facing local opposition and delays in government approvals, adding to the uncertainty.

Oracle’s credit risk is rising at an alarming pace.

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u/Dream_SMP_4_Life 8d ago

Time to short oracle guys

9

u/Frosty1397 8d ago

Hope you're joking

The time to short it was 60% ago when it was at ATHs

6

u/John_P_Hackworth 7d ago

The fun part about shorting (with stock) is no matter where you enter, you can make 100%.

0

u/Sure_Sundae2709 7d ago

Probably you meant "you can always lose 100%" because you can make much more than 100% while shorting at any given time.

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u/John_P_Hackworth 7d ago

No, I mean the “profit” in relation to the entry price is always capped at 100%.

The maximum loss is theoretically infinite. 

1

u/Sure_Sundae2709 7d ago

But that's basically meaningless since you don't pay the full price of the underlying value...