Why Wouldn't Larry Ellison Sell Oracle Equity?

David Senra reads Larry Ellison's refusal to sell Oracle equity. He loathes selling it, and in 1991 he still refused while Oracle's stock price was dropping and the company was almost running out of cash. He kept searching for unusual ways to raise cash without giving up his place as Oracle's dominant shareholder.

The most urgent problem was Oracle's dangerous cash crunch. A conventional financing solution would only have been available on punitive terms that would undermine his position. One employee's mission was to get around $200 million while giving away as little Oracle equity as possible. Instead of surrendering equity in Oracle to pay off the banks, Ellison secured an $80 million loan on highly favorable terms by going to Japan, where the economy was doing great. In exchange for the loan, a Japanese company received warrants to buy up to 25% of Oracle Japan at a price that put the value of the subsidiary at $400 million.

The loan was the cash. What the Japanese company received in return was a warrant on Oracle Japan, and Oracle equity was the stake Ellison held back.