Oracle beat earnings. The stock tanked. This makes perfect sense if you understand that beating earnings means nothing when you admit in the same breath that you need to borrow $20 billion because your free cash flow is negative.
Free cash flow is negative. That's the money left over after you pay for the things you need to run the business. Oracle doesn't have money left over. Oracle has the opposite of money left over. They have a hole where money used to be.
The data center projects require capital. How much capital? Another $20 billion in capital. They already raised money for data centers. Now they need more money for data centers. At some point you're not building data centers. You're building a monument to the idea that if you just had a little more money, the data centers would finally work.
Retail traders saw the earnings beat and bought the stock in after-hours trading. Then Oracle said the thing about needing $20 billion. Then the stock dropped. The traders who bought on the earnings beat now own shares in a company that just told them it's out of cash.
Larry Ellison is worth $180 billion. He could write a personal check for the data centers. He won't. He'll borrow $20 billion and dilute your shares or saddle the company with debt because that's what rich people do when they run out of other people's money. They ask for more other people's money.
The technical setup is irrelevant because Oracle's chart doesn't care that the company beat on revenue while hemorrhaging cash. But go ahead and buy the dip on a company that just announced it needs to raise enough money to buy Netflix.
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