Oracle Corporation's stock fell approximately 4-5% following a lawsuit filed by a group of bondholders, led by the Ohio Carpenters’ Pension Plan, in a New York state court. The investors allege the company concealed its immediate plans for massive additional borrowing to fund artificial intelligence infrastructure tied to its partnership with OpenAI.
The lawsuit centers on an $18 billion bond sale completed on September 25, 2025. Bondholders claim the offering documents were misleading, stating Oracle "may" need to borrow more in the future. However, just seven weeks later, the company returned to capital markets to raise $38 billion in loans specifically earmarked to build two new data centers in Texas and Wisconsin to fulfill its $300 billion, five-year computing contract with OpenAI.
The plaintiffs argue the rapid follow-on borrowing crushed the value of the bonds they had just purchased, causing prices to drop and yields to jump as the market reassessed Oracle's credit risk. The lawsuit names Oracle, founder Larry Ellison, former CEO Safra Catz, chief accounting officer Maria Smith, and 16 underwriting banks as defendants, seeking unspecified damages under the Securities Act of 1933.
Adding to investor concerns, reports surfaced that Blue Owl Capital exited a planned equity investment in a major Oracle data center project in Michigan, citing deal terms and political uncertainty. Blackstone is now in talks to step in, with Bank of America leading a $14 billion debt package for the development.
Despite the bearish sentiment, some technical analysts see potential for a rebound. Fairlead's Katie Stockton noted Oracle has stabilized near long-term support between $190 and $195, with indicators suggesting a possible breakout targeting $242 if the stock clears the 50-day moving average near $210.
