11 ms·

Oracle directors give blessing to shareholder lawsuit against Larry Ellison

191 points by wstrange 7y ago

Zaheer 7y ago
Can anyone explain how / why the Firemen's retirement system is involved in this? > As Frankel wrote in her article, the lawsuit, which was originally filed by the Firemen’s Retirement System of St. Louis, could be worth billions:
- jcims 7y ago
  Probably just the first ones to pull the trigger. I don’t understand what the lawsuit is about though, seems like they are just complaining about performance of the acquisition? People just drunk on Oracle koolaid?
- redwood 7y ago
  Pension funds typically are some of the largest institutional owners of major public companies.
  - adw 7y ago
    You can connect the SV housing bubble fairly directly to pension funds piling money into tech stocks and venture capital after the late-00s global financial crisis (because bond yields were in the gutter and they're more or less obliged to seek returns somewhere, and they weren't available in less risky instruments). Same kind of problem Berkshire Hathaway has; once you're big enough, available returns are limited by how much you yourself distort the market. Pension funds used to be able to buy almost limitless bonds in order to lock in annuity returns, but a) a bunch of them are a long way underwater and b) the effective rate of interest on bonds was below zero so they were forced to seek riskier assets, bidding up the price on those, which... etc etc etc. Capital concentration – huge pension schemes, enormous corporations, big university endowments – has weird effects and it happens in all kinds of places.
    - pm90 7y ago
      I wonder what would be a good way to deploy that concentrated capital. Essentially, it’s the combined labor of a large pool of people, hoping that their capital will be deployed in places where it will earn great returns. What happens when these pockets of wealth don’t have anywhere to go? Related: pensions are out of fashion in the US. Where is the wealth of young Americans going nowadays?
      - ummonk 7y ago
        >Where is the wealth of young Americans going nowadays? 401k / ira though more commonly paying down student debt.
      - pianoben 7y ago
        Rent, healthcare, etc. Some have 401k accounts, if they are lucky, otherwise you have IRAs which have an annual contribution limit of $6000, IIRC (am not an expert and am likely wrong on that point). Pensions are unavailable and housing is out of reach for most.
      - neom 7y ago
        Most Americans don't have student debt to pay down (44million), nor a 401k (55million). Most young Americans are just trying to get by, I'd imagine "wealth" isn't a reality for most, outside of maybe emotional wealth.
      - toomuchtodo 7y ago
        There are few, if any, productive ways to deploy those huge swaths of capital that can command the risk adjusted returns those funds seek. See: negative yields on bonds across the world, and VC gambles.
      - hermitdev 7y ago
        I'm 38 and have a pretty good salary. About 50% after tax goes to rent, 25% goes to paying down debt inherited from getting married and medical bills (previous employer had shit insurance). The last 25% is what we live on for essentials (insurance, gas and tolls to go to work, utilities, food, etc). My wife and I have long ago paid off out student loan debt. We have 10s of thousands in high interest, unsecured debt. Debt, that in theory we could pay off tomorrow from savings. However, since most of my savings (my wife has none) is spread across 2 401ks, a Roth IRA, a traditional IRA and a taxed investment account, and I work for an investment fund, I'm subject to all sorts of lockups, retention requirements and blacklists on trades on securities held by my employer. Tl;Dr; I have savings to cover my debts, but cant legally access most of it. I'm not unhappy that I got married, but I didn't consider the financial repercussions before I went through with it.
data4lyfe 7y ago
I need the simple English version on what exactly this lawsuit is about.
- bob1029 7y ago
  Larry Ellison owned 40% of NetSuite when it was purchased at a very high price. He effectively ran both sides of the deal (between oracle and NetSuite) and funneled shareholder money into his own pockets via the transaction. Allegedly.
  - lonelappde 7y ago
    Sold for $10B (3 years ago). 40% of that is $4B, of Ellison's $65B financial networth. The amount Ellison profited from scheming (the premium over actual value, discounted by the fact that Ellison owns much of money being spent on the purchase) seems...not big enough to matter? But his greed is unbridled?
    - rosybox 7y ago
      I don't really understand when you already have billions of dollars why having more billions of dollars even matters anymore. How is more billions going to change your standard of living? You can buy two islands instead of just one? When you have so much money, how is getting more money a motivation?
      - wstrange 7y ago
        Being richer than Bezos or Buffet
        jjeaff 7y ago
        He must realize that ain't happening. He's squeezing the last bit out of Oracle before it gets crushed by it's incumbents.
      - felipemnoa 7y ago
adonnjohn 7y ago
Sorry, I don't really understand from the article: how exactly did the accused supposedly break fiduciary obligations? Does it solely have to do with Larry's previous involvement in NetSuite?
- yellowapple 7y ago
  Per the Reuters article [0], it sounds like Ellison had a vested interest (of the financial variety) in Oracle acquiring NetSuite at a premium unreasonably higher than NetSuite's actual value, so that's why the shareholders are suing him. [0]: https://www.reuters.com/article/otc-oracle-idUSKCN1V91UJ https://www.reuters.com/article/otc-oracle-idUSKCN1V91UJ
  - adonnjohn 7y ago
    The Reuters article is a much better explanation, thank you for sharing it.
  - JohnJamesRambo 7y ago
    How much WeWork pays the owner for his properties would look bad through this same lens.
    - mlyle 7y ago
      Self-dealing is always questionable, and it seems like we're getting a whole lot of this corruption lately.
    - lern_too_spel 7y ago
      WeWork's investors are free to sue. That would probably derail the IPO to make it net negative for them.
      - nyolfen 7y ago
        it’s a brilliant scheme. he also squatted domains and a trademark prior to renaming and hasn’t faced consequences for the same reason
yellowapple 7y ago
Ironic; even Oracle execs ain't immune to being sued by Oracle.
- cat199 7y ago
  alternatively: if you live by the sword...
- NikkiA 7y ago
  Calling Larry an 'exec' is seriously downplaying his role in Oracle though, he is, after all, co-founder, chairman and ex-CEO of the company.
  - yellowapple 7y ago
    The current CEO is also a target of said lawsuit-blessing, so "execs" is a reasonable description that encompasses both (without something wordier like "current and former Oracle CEOs").
totaldude87 7y ago
Good luck fighting Oracle's elite lawyers .. Suits. Season 11 awaits
- onetimemanytime 7y ago
  There are other elite lawyers in the country...just give them a chance to sue a rich, greedy person and they'll do it. For bragging rights. And money
microtherion 7y ago
I expect that some former SolarCity shareholders will be watching this lawsuit closely.
- joelx 7y ago
  You mean Tesla. SolarCity was bankrupt and worthless nearly when Musk overpaid for it.
stevespang 7y ago
Couldn't have happened to a nicer guy (sic). Larry Ellison is despised by many throughout the tech world for his arrogance and conniving behavior, his legal threats, etc.
thesausageking 7y ago
Queue Bryan Cantrill's (DTrace, Joyent) USENIX talk on Oracle and Larry Ellison: https://youtu.be/-zRN7XLCRhc?t=2034 https://youtu.be/-zRN7XLCRhc?t=2034
- techntoke 7y ago
  I really don't want to watch a long video. Is there a link that lays out his thoughts in text?
  - neilv 7y ago
    The video has a text slide, but perhaps the more pertinent assertions are: * Oracle was extremely straightforward about caring about only money. (In contrast to Sun, or even to the claims of investment banks.) * Oracle was that way because it was the alter-ego of Ellison. (With funny bit about not attempting to anthropomorphize Ellison.) (What Cantrill didn't mention, when alleging Ellison's simplicity, was Ellison's supposed intense competitiveness with, or hatred of, Bill Gates. I happened to bump into Ellison once, at an event, and seemed to see a hint of that firsthand.)
  - dralley 7y ago
    Timestamp 33:40
  - thesausageking 7y ago
    I linked to 34:00 min in, which is where the part on Oracle and Ellison starts and is only a few minutes long (and very funny). Bryan talks about his experiences being at Sun after it was acquired by Oracle and the sad demise of OpenSolaris.
  - andyjohnson0 7y ago
    Quote: "As you know people, as you learn about things, you realize that these generalizations we have are, virtually to a generalization, false. Well, except for this one, as it turns out. What you think of Oracle, is even truer than you think it is. There has been no entity in human history with less complexity or nuance to it than Oracle. And I gotta say, as someone who has seen that complexity for my entire life, it’s very hard to get used to that idea. It’s like, ‘surely this is more complicated!’ but it’s like: Wow, this is really simple! This company is very straightforward, in its defense. This company is about one man, his alter-ego, and what he wants to inflict upon humanity — that’s it! …Ship mediocrity, inflict misery, lie our asses off, screw our customers, and make a whole shitload of money. Yeah… you talk to Oracle, it’s like, ‘no, we don’t fucking make dreams happen — we make money!’ …You need to think of Larry Ellison the way you think of a lawnmower. You don’t anthropomorphize your lawnmower, the lawnmower just mows the lawn, you stick your hand in there and it’ll chop it off, the end. You don’t think ‘oh, the lawnmower hates me’ — lawnmower doesn’t give a shit about you, lawnmower can’t hate you. Don’t anthropomorphize the lawnmower. Don’t fall into that trap about Oracle." Source: http://news.ycombinator.com/item?id=5170246 http://news.ycombinator.com/item?id=5170246
poseva 7y ago
It seems that Oracle is like a cradle of corruption: https://emerging-europe.com/news/oracle-romania-boss-accused-of-taking-870000-euros-in-bribes/ https://emerging-europe.com/news/oracle-romania-boss-accused...
IG_Semmelweiss 7y ago
The BS-mometer on this one is off the scale... Allow me to explain 1 - a bunch of professional investors (the "affected") and money managers buy material stakes in Oracle 2 - the affected elect the CEO 3 - the affected elect board members 4 - the CEO explores, consults and executes on M&A transaction 5 - the board members vote on M&A deal 6 - the largest affected hear specifics of M&A deal and weigh in 7 - deal loses money. The affected want to sue. I count no less than 4 times in which the affected as stakeholders should have made better decision. And a few other steps when other parties would have prevented problems if the affected parties had not been asleep at the wheel These sort of lawsuits never happen because the improbability of investors clawing money back off their own (not others) mistakes. And make no mistake. There is an element of sour grapes here.
markonen 7y ago
Top 60 Licensing Pitfalls For Oracle Databases And Oracle Technology Products: http://omtco.eu/references/oracle/top-60-licensing-pitfalls-for-oracle-databases-and-oracle-technology-products/ http://omtco.eu/references/oracle/top-60-licensing-pitfalls-... I saw this document linked on Twitter yesterday and it's just amazing. I always knew that Larry Ellison's mug was in the dictionary next to the definition of "customer hostility", but man, it's another thing altogether to read the top 60 ways Oracle will screw you. My favorite is how you can't use Oracle Technology Network (OTN DEV) licenses for testing. They're only for development, which is something you do without testing.
codesternews 7y ago
What is current Oracle DB alternative which can fully replace it? Do we have any option in market which can fully replace Oracle DB?
- christophilus 7y ago
  It depends on how you use Oracle DB, but in my opinion SQL Server and Postgres can both replace Oracle for every application I've ever seen.
- Bartweiss 7y ago
  What's hard to replace about it? That's not meant as a dismissal, I'm just not very familiar with Oracle DB and I haven't heard about it dominating on query performance or language features. That might imply it wins at scales I haven't ever needed, but I could imagine some other reasons. Are the standing advantages support and scaling, basic features, or something else?
  - Can_Not 7y ago
    I have heard rumors that Oracle DB is the best, but I've heard too many bad things about the parent company to ever look outside of postgres/mariadb.

191 points by wstrange 7y ago

Can anyone explain how / why the Firemen's retirement system is involved in this? > As Frankel wrote in her article, the lawsuit, which was originally filed by the Firemen’s Retirement System of St. Louis, could be worth billions:

jcims 7y ago
Probably just the first ones to pull the trigger. I don’t understand what the lawsuit is about though, seems like they are just complaining about performance of the acquisition? People just drunk on Oracle koolaid?
redwood 7y ago
Pension funds typically are some of the largest institutional owners of major public companies.
- adw 7y ago
  You can connect the SV housing bubble fairly directly to pension funds piling money into tech stocks and venture capital after the late-00s global financial crisis (because bond yields were in the gutter and they're more or less obliged to seek returns somewhere, and they weren't available in less risky instruments). Same kind of problem Berkshire Hathaway has; once you're big enough, available returns are limited by how much you yourself distort the market. Pension funds used to be able to buy almost limitless bonds in order to lock in annuity returns, but a) a bunch of them are a long way underwater and b) the effective rate of interest on bonds was below zero so they were forced to seek riskier assets, bidding up the price on those, which... etc etc etc. Capital concentration – huge pension schemes, enormous corporations, big university endowments – has weird effects and it happens in all kinds of places.
  - pm90 7y ago
    I wonder what would be a good way to deploy that concentrated capital. Essentially, it’s the combined labor of a large pool of people, hoping that their capital will be deployed in places where it will earn great returns. What happens when these pockets of wealth don’t have anywhere to go? Related: pensions are out of fashion in the US. Where is the wealth of young Americans going nowadays?
    - ummonk 7y ago
      >Where is the wealth of young Americans going nowadays? 401k / ira though more commonly paying down student debt.
    - pianoben 7y ago
      Rent, healthcare, etc. Some have 401k accounts, if they are lucky, otherwise you have IRAs which have an annual contribution limit of $6000, IIRC (am not an expert and am likely wrong on that point). Pensions are unavailable and housing is out of reach for most.
    - neom 7y ago
      Most Americans don't have student debt to pay down (44million), nor a 401k (55million). Most young Americans are just trying to get by, I'd imagine "wealth" isn't a reality for most, outside of maybe emotional wealth.
    - toomuchtodo 7y ago
      There are few, if any, productive ways to deploy those huge swaths of capital that can command the risk adjusted returns those funds seek. See: negative yields on bonds across the world, and VC gambles.
    - hermitdev 7y ago
      I'm 38 and have a pretty good salary. About 50% after tax goes to rent, 25% goes to paying down debt inherited from getting married and medical bills (previous employer had shit insurance). The last 25% is what we live on for essentials (insurance, gas and tolls to go to work, utilities, food, etc). My wife and I have long ago paid off out student loan debt. We have 10s of thousands in high interest, unsecured debt. Debt, that in theory we could pay off tomorrow from savings. However, since most of my savings (my wife has none) is spread across 2 401ks, a Roth IRA, a traditional IRA and a taxed investment account, and I work for an investment fund, I'm subject to all sorts of lockups, retention requirements and blacklists on trades on securities held by my employer. Tl;Dr; I have savings to cover my debts, but cant legally access most of it. I'm not unhappy that I got married, but I didn't consider the financial repercussions before I went through with it.

data4lyfe 7y ago

I need the simple English version on what exactly this lawsuit is about.

bob1029 7y ago
Larry Ellison owned 40% of NetSuite when it was purchased at a very high price. He effectively ran both sides of the deal (between oracle and NetSuite) and funneled shareholder money into his own pockets via the transaction. Allegedly.
- lonelappde 7y ago
  Sold for $10B (3 years ago). 40% of that is $4B, of Ellison's $65B financial networth. The amount Ellison profited from scheming (the premium over actual value, discounted by the fact that Ellison owns much of money being spent on the purchase) seems...not big enough to matter? But his greed is unbridled?
  - rosybox 7y ago
    I don't really understand when you already have billions of dollars why having more billions of dollars even matters anymore. How is more billions going to change your standard of living? You can buy two islands instead of just one? When you have so much money, how is getting more money a motivation?
    - wstrange 7y ago
      Being richer than Bezos or Buffet
      - jjeaff 7y ago
        He must realize that ain't happening. He's squeezing the last bit out of Oracle before it gets crushed by it's incumbents.
    - felipemnoa 7y ago

adonnjohn 7y ago

Sorry, I don't really understand from the article: how exactly did the accused supposedly break fiduciary obligations? Does it solely have to do with Larry's previous involvement in NetSuite?

yellowapple 7y ago
Per the Reuters article [0], it sounds like Ellison had a vested interest (of the financial variety) in Oracle acquiring NetSuite at a premium unreasonably higher than NetSuite's actual value, so that's why the shareholders are suing him. [0]: https://www.reuters.com/article/otc-oracle-idUSKCN1V91UJ https://www.reuters.com/article/otc-oracle-idUSKCN1V91UJ
- adonnjohn 7y ago
  The Reuters article is a much better explanation, thank you for sharing it.
- JohnJamesRambo 7y ago
  How much WeWork pays the owner for his properties would look bad through this same lens.
  - mlyle 7y ago
    Self-dealing is always questionable, and it seems like we're getting a whole lot of this corruption lately.
  - lern_too_spel 7y ago
    WeWork's investors are free to sue. That would probably derail the IPO to make it net negative for them.
    - nyolfen 7y ago
      it’s a brilliant scheme. he also squatted domains and a trademark prior to renaming and hasn’t faced consequences for the same reason

yellowapple 7y ago

Ironic; even Oracle execs ain't immune to being sued by Oracle.

cat199 7y ago
alternatively: if you live by the sword...
NikkiA 7y ago
Calling Larry an 'exec' is seriously downplaying his role in Oracle though, he is, after all, co-founder, chairman and ex-CEO of the company.
- yellowapple 7y ago
  The current CEO is also a target of said lawsuit-blessing, so "execs" is a reasonable description that encompasses both (without something wordier like "current and former Oracle CEOs").

totaldude87 7y ago

Good luck fighting Oracle's elite lawyers .. Suits. Season 11 awaits

onetimemanytime 7y ago
There are other elite lawyers in the country...just give them a chance to sue a rich, greedy person and they'll do it. For bragging rights. And money

microtherion 7y ago

I expect that some former SolarCity shareholders will be watching this lawsuit closely.

joelx 7y ago
You mean Tesla. SolarCity was bankrupt and worthless nearly when Musk overpaid for it.

stevespang 7y ago

Couldn't have happened to a nicer guy (sic). Larry Ellison is despised by many throughout the tech world for his arrogance and conniving behavior, his legal threats, etc.

thesausageking 7y ago

Queue Bryan Cantrill's (DTrace, Joyent) USENIX talk on Oracle and Larry Ellison: https://youtu.be/-zRN7XLCRhc?t=2034 https://youtu.be/-zRN7XLCRhc?t=2034

techntoke 7y ago
I really don't want to watch a long video. Is there a link that lays out his thoughts in text?
- neilv 7y ago
  The video has a text slide, but perhaps the more pertinent assertions are: * Oracle was extremely straightforward about caring about only money. (In contrast to Sun, or even to the claims of investment banks.) * Oracle was that way because it was the alter-ego of Ellison. (With funny bit about not attempting to anthropomorphize Ellison.) (What Cantrill didn't mention, when alleging Ellison's simplicity, was Ellison's supposed intense competitiveness with, or hatred of, Bill Gates. I happened to bump into Ellison once, at an event, and seemed to see a hint of that firsthand.)
- dralley 7y ago
  Timestamp 33:40
- thesausageking 7y ago
  I linked to 34:00 min in, which is where the part on Oracle and Ellison starts and is only a few minutes long (and very funny). Bryan talks about his experiences being at Sun after it was acquired by Oracle and the sad demise of OpenSolaris.
- andyjohnson0 7y ago
  Quote: "As you know people, as you learn about things, you realize that these generalizations we have are, virtually to a generalization, false. Well, except for this one, as it turns out. What you think of Oracle, is even truer than you think it is. There has been no entity in human history with less complexity or nuance to it than Oracle. And I gotta say, as someone who has seen that complexity for my entire life, it’s very hard to get used to that idea. It’s like, ‘surely this is more complicated!’ but it’s like: Wow, this is really simple! This company is very straightforward, in its defense. This company is about one man, his alter-ego, and what he wants to inflict upon humanity — that’s it! …Ship mediocrity, inflict misery, lie our asses off, screw our customers, and make a whole shitload of money. Yeah… you talk to Oracle, it’s like, ‘no, we don’t fucking make dreams happen — we make money!’ …You need to think of Larry Ellison the way you think of a lawnmower. You don’t anthropomorphize your lawnmower, the lawnmower just mows the lawn, you stick your hand in there and it’ll chop it off, the end. You don’t think ‘oh, the lawnmower hates me’ — lawnmower doesn’t give a shit about you, lawnmower can’t hate you. Don’t anthropomorphize the lawnmower. Don’t fall into that trap about Oracle." Source: http://news.ycombinator.com/item?id=5170246 http://news.ycombinator.com/item?id=5170246

poseva 7y ago

It seems that Oracle is like a cradle of corruption: https://emerging-europe.com/news/oracle-romania-boss-accused-of-taking-870000-euros-in-bribes/ https://emerging-europe.com/news/oracle-romania-boss-accused...

IG_Semmelweiss 7y ago

The BS-mometer on this one is off the scale... Allow me to explain 1 - a bunch of professional investors (the "affected") and money managers buy material stakes in Oracle 2 - the affected elect the CEO 3 - the affected elect board members 4 - the CEO explores, consults and executes on M&A transaction 5 - the board members vote on M&A deal 6 - the largest affected hear specifics of M&A deal and weigh in 7 - deal loses money. The affected want to sue. I count no less than 4 times in which the affected as stakeholders should have made better decision. And a few other steps when other parties would have prevented problems if the affected parties had not been asleep at the wheel These sort of lawsuits never happen because the improbability of investors clawing money back off their own (not others) mistakes. And make no mistake. There is an element of sour grapes here.

markonen 7y ago

Top 60 Licensing Pitfalls For Oracle Databases And Oracle Technology Products: http://omtco.eu/references/oracle/top-60-licensing-pitfalls-for-oracle-databases-and-oracle-technology-products/ http://omtco.eu/references/oracle/top-60-licensing-pitfalls-... I saw this document linked on Twitter yesterday and it's just amazing. I always knew that Larry Ellison's mug was in the dictionary next to the definition of "customer hostility", but man, it's another thing altogether to read the top 60 ways Oracle will screw you. My favorite is how you can't use Oracle Technology Network (OTN DEV) licenses for testing. They're only for development, which is something you do without testing.

codesternews 7y ago

What is current Oracle DB alternative which can fully replace it? Do we have any option in market which can fully replace Oracle DB?

christophilus 7y ago
It depends on how you use Oracle DB, but in my opinion SQL Server and Postgres can both replace Oracle for every application I've ever seen.
Bartweiss 7y ago
What's hard to replace about it? That's not meant as a dismissal, I'm just not very familiar with Oracle DB and I haven't heard about it dominating on query performance or language features. That might imply it wins at scales I haven't ever needed, but I could imagine some other reasons. Are the standing advantages support and scaling, basic features, or something else?
- Can_Not 7y ago
  I have heard rumors that Oracle DB is the best, but I've heard too many bad things about the parent company to ever look outside of postgres/mariadb.