It’s worthwhile to keep track of big-money insider trading. However, not all share sales should be construed as bad news. With cloud contender Oracle (NYSE:ORCL), it’s true that the company’s founder sold off a sizable chunk of ORCL stock.
Nevertheless, there are reasons for investors to stay the course with Oracle in 2023.
As we’ll discover, Oracle has a significant connection to the generative artificial intelligence field now.
Oracle continues to generate strong revenue through its cloud-market offerings. All in all, Oracle is a worthy tech company irrespective of the founder’s multimillion-dollar share sale.
Which Corporate Insider Sold ORCL Stock?
So, here’s the lowdown. None other than Oracle’s founder and current Executive Chairman Larry Ellison recently sold 5.25 million shares of ORCL stock. This is notable for the size of the sale, and also because prior to this, Ellison hadn’t sold Oracle shares since May of 2021.
There’s no need to freak out, though. Most likely, Ellison was only engaging in some profit-taking. Barron’s reports that, through options trading, Ellison acquired 5.25 million Oracle shares “for $158.1 million, or $30.11 each.”
Then, he sold the aforementioned 5.25 million shares for a whopping $640 million, at an average share price of $121.98 each.
That’s a huge profit, so can anyone really blame Ellison for taking some chips off the table? Besides, he still holds 1.15 billion shares of ORCL stock. Hence, Ellison is clearly still optimistic about Oracle’s future prospects.
Oracle Delves Into the Generative AI Tech Market
Is it smart for Ellison to continue holding over a billion shares of Oracle? I’d say the answer is yes, as Oracle is a cloud king among software purveyors.
There’s more to the story with Oracle, however, as the company is diving headfirst into the machine-learning fray with “plans to develop powerful, generative AI services for organizations worldwide.”
This will be a collaboration with enterprise AI company Cohere, in which they will integrate Cohere’s language models into Oracle’s business applications.
Oracle will “enable customers to quickly and securely deploy generative AI to solve their most pressing business challenges.” Thus, Oracle is leaning heavily into the generative AI trend, which is what many customers and investors undoubtedly want to see.
During the coming quarters, it will be interesting to find out how Oracle’s new AI offerings will affect the company’s top and bottom lines.
Don’t Be Alarmed by Founder’s ORCL Stock Sale
It’s true that Ellison sold some of his stake in Oracle, but he still has a sizable share position in the company. It’s likely that Ellison was only engaging in some perfectly understandable profit-taking.
The point is, Oracle is still a powerful cloud-market revenue generator. In addition, the company is now deeply involved in generative AI technology. So, don’t obsess over Ellison’s large-scale share sale.
Instead, consider buying a few shares of ORCL stock as Oracle makes waves in the cloud-computing and machine-learning fields.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.