Seen this movie before, HP went up on MH cost cuts and then crashed into oblivion. Now it's oracle's turn
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Hype and cost cuts, no substance behind it, oracle cloud offering are junk, watch out for the fall, it will be painful, just look at HP, this is a rerun
Given ORCL revenue is UP then "continuous declining revenues" is wide of the mark. It looks to me that ORCL is now being run excellently and the strategy is delivering stellar returns for shareholders. There's no greater a time to be an Oracle employee than today.
Keep in mind that Ellison still calls the shots. If MH really was in charge he wouldn't have invested a penny in Cloud tech. MH is a salesman and SC is a bean counter. If Ellison ever retires, or suddenly dies, then Oracle will go down the drain like HP has.
The increase in profits is all due to layoffs, but who is left to sell, support and develop new products? Cheap newbies with no experience. Totally unsustainable. And then there is AWS, Google, MSFT, and SFDC, each of whom is investing much, much more than oracle. This surge in the share price is the dead cat bounce. Oreacle is done.
That's what everyone fears - he's good at controlling cost but he pays for it with continuous declining revenues - initially he's able to prop up profits as the cost cutting factor is stronger than the declining revenue factor. However, eventually the two factors will swap places and profits will start declining.
We are at that point right now, they are about to swap and Oracle is done. Just like HP, HPE or DXC (or whatever that new name for HPE is).
Ginny Romety of IBM is doing the same thing - they are cutting deep and it's OK on the profit side, but she just had 20 consecutive quarters of declining revenue and soon there will be nothing left to cut - that's why Buffett sold his IBM positions and waived them good bye.