Oracle Corporation (ORCL)

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Oracle sees share price rise as institutional and insider ownership remains high
By: Investing | November 12, 2023

NEW YORK - Oracle Corporation (NYSE:ORCL), a leading technology firm with a market capitalization of $310 billion, recently experienced a 4.6% increase in its share price, reflecting the significant role institutional investors play in the company's stock performance. These investors hold 43% of Oracle's shares, aligning their interests with the company's long-term trends and contributing to its strong one-year return on investment of 48%.

The ownership structure of Oracle highlights insider confidence, with Lawrence Ellison, the Top Key Executive, owning 42% of the company. This level of insider ownership is often seen as a positive sign, indicating that board members are committed to investing alongside shareholders. However, it also raises questions about board accountability due to the concentration of voting power. The second and third largest shareholders hold approximately 5.1% and 4.4% of the stock, respectively, consolidating more than half of Oracle's shares among the top three shareholders.

Despite individual investors holding a smaller portion of the equity at 14%, their collective stake is enough to potentially influence company policies, even though they may not have the power to sway decisions on their own.

Investors are advised to consider analyst forecasts and be cognizant of potential warning signs that could affect Oracle's future performance. Analysts provide valuable insights into expected stock trends, which can help investors make informed decisions. The risk associated with a significant drop in share price due to possible simultaneous sell-offs by large institutional owners should be taken into account, especially given insiders' substantial control over $130 billion worth of shares.

As Oracle continues to be included in benchmark indexes, its appeal to institutional investors is likely to persist, making its role in shaping the company's stock price and policies an ongoing point of interest for market watchers.

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