$ORCL daily pick: sell Dec 4 $105 put (buy-side) after the $20B raise selloff

$ORCL: I'm selling the Dec 4 $105 put on @Oracle after today's 6% drop on the $20B stock and bond sale.

Live at 12:14pm ET ($122.59, down 6.2%):
22% under the 200-day
Credit $2.06 for about 2% in 32 days (~22% annualized)
Breakeven $102.94, 16% below today
About 15x fiscal 2027 EPS estimates

I think the dilution scare is overdone because this is the $20B Oracle already flagged at last week's investor day and it capped new outside funding at that amount through fiscal 2030.

If it gets put to me I own Oracle at roughly 60% below where it traded a year ago. I can live with that.

Not financial advice

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Why a put and not shares? Free cash flow was -$28.7B over the last four quarters and Oracle doesn't expect it to turn positive until the second half of fiscal 2028. Debt was $125.3B at the end of August. I'd rather collect $206 and let it come to me under $105.

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Don't have $10,500 sitting in cash? Defined-risk version: sell the $105 put and buy the Dec 4 $95 put for about $1.20 credit. Max risk $880 and breakeven $103.80. You lose the full $880 if ORCL is under $95 on Dec 4.

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Bear case: S&P rates Oracle BBB- which is one notch above junk and a lot of the cloud backlog leans on OpenAI. The stock is down 15% in three sessions since the investor day pop. If AI credit worries spread my strike is in play. That's why it sits 14% below today and under the $114.50 July low.

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What I'd watch: whether the stock holds that July low and how the $10B bond deal prices. Oracle is guiding fiscal 2030 revenue of at least $225B and Stephens upgraded it to Overweight this morning with a $213 target. The next report is expected mid-December so this put expires before the print.

Sources: CNBC: Oracle files to sell $20B in new stock and bonds · Invezz: Why Oracle stock is falling nearly 6% Monday · Reuters: Oracle to offer $10B of bonds · Investing.com: Stephens upgrades Oracle, PT $213 · TipRanks/The Fly: Stephens upgrade, funding capped at $20B · TradingKey: ORCL market movers Nov 2

Not financial advice. For informational and educational purposes only.