Rumors Spur Fall in Oracle Shares
Shares of Oracle Corp. plunged in wild trading Thursday before the world’s second-largest computer software company denied speculation that its respected chief financial officer, Jeff Henley, was leaving.
Other rumors had Oracle’s chief executive, Larry Ellison, stepping down.
The stock (ticker symbol: ORCL) fell as low as $27.25 on Nasdaq from Wednesday’s close of $31.38, then rebounded after the Redwood City-based firm called the speculation “totally unfounded.”
The share price still finished off $1.81 at $29.56, the lowest since February--on a day when many other tech issues rallied. Volume totaled more than 149 million shares, making Oracle the second-most-active U.S. stock.
The abrupt departure of any major company executive can rattle investors, but Wall Street is particularly nervous about Oracle’s management structure after a power struggle resulted in the June ouster of President Ray Lane.
Lane was viewed as an important counterweight to the company’s unpredictable founder and CEO, Ellison.
Thursday’s market action may have been sparked by disclosure Monday that Henley had filed to sell 500,000 of his Oracle shares, said analyst Jim Mendelson, who follows Oracle for Wit Soundview.
But “I will be totally surprised if there is any unorchestrated change in management at Oracle now that Ray Lane isn’t there anymore,” Mendelson said.
Oracle has been the target of frequent rumors in recent months, reflecting high anxiety about tech stocks and specific worries about potentially slower sales growth in some of the company’s product lines.
Dresdner RCM Global Investors Managing Director Walter Price Jr. last week said he had sold his entire stake in Oracle because he questioned the company’s strategy of selling as a package software that handles different tasks.
“We don’t think they’re getting the traction in applications that they talk about,” he said.
Rather than buy a suite of software that works together, businesses generally prefer to get software components from various vendors, Price said.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Softening Price
Shares of database software giant Oracle have fallen to their lowest level since February, pressured in large part by sales-growth concerns.
*
Oracle shares (ORCL), monthly closes and latest on Nasdaq
Thursday: $29.56, down $1.81
Source: Bloomberg News
