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Larry Ellison of Oracle Burning up Cash or maybe not!
Old 02-01-2006, 07:29 PM   #1
 
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Larry Ellison of Oracle Burning up Cash or maybe not!

JUst saw a story on the news about Larry Ellison of Oracle being warned about spending too much money by his accountants. His Net worth in Oracle is Worth 17 Billion. They said he was burning up cash at the rate of $55,000 per day.

My calculations say that is only about $20 Million a year. A little more than a Tenth of a Percentage point for a SWR. A 4% number would be $680 Million a year!

My quick calculations may be wrong or the accountants just freak when they see this much money spent!
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!
Old 02-01-2006, 08:24 PM   #2
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!

Quote:
Originally Posted by Cut-Throat
JUst saw a story on the news about Larry Ellison of Oracle being warned about spending too much money by his accountants. His Net worth in Oracle is Worth 17 Billion. They said he was burning up cash at the rate of $55,000 per day.

My calculations say that is only about $20 Million a year. A little more than a Tenth of a Percentage point for a SWR. A 4% number would be $680 Million a year!

My quick calculations may be wrong or the accountants just freak when they see this much money spent!
Looks like your calculations are correct. But it would appear the $55k a day in "lifestyle expenses" is only a small part of the problem:

...$100 million went into his unsuccessful attempt to win the America's Cup sailing race.

He's rumored to have spent $200 million building a Japanese-style estate above Silicon Valley. Now, documents filed in a since settled lawsuit charging insider trading are giving an inside look at the billionaire's budget. A handwritten note from Ellison's accountant sets out expenditures: $194 million on a new yacht, $25 million on a villa in Japan and $20 million a year on "lifestyle."

Worried about your credit card bill? Ellison spent $75 million in interest payments on bank loans.


It seems, however, that Ellison paid little mind to the advice given by his accountant. He later went on a beachfront buying spree in Malibu spending $200 million on a string of luxury properties.

http://www.cbsnews.com/stories/2006/...n1271547.shtml

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Re: Larry Ellison of Oracle Burning up Cash or maybe not!
Old 02-01-2006, 08:26 PM   #3
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!

Wouldn't it take about 850 years to spend down $17 billion at a rate of $20 million a year?

Seeing that Larry is 62 this year, he should be fine.
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!
Old 02-01-2006, 08:32 PM   #4
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!

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Worried about your credit card bill? Ellison spent $75 million in interest payments on bank loans.
This part is worrying. How could somebody with $17 billion have bank loans? He should be giving loans to the banks.
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!
Old 02-01-2006, 08:37 PM   #5
 
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!

Quote:
Originally Posted by REWahoo!
Looks like your calculations are correct. But it would appear the $55k a day in "lifestyle expenses" is only a small part of the problem:

...$100 million went into his unsuccessful attempt to win the America's Cup sailing race.

He's rumored to have spent $200 million building a Japanese-style estate above Silicon Valley. Now, documents filed in a since settled lawsuit charging insider trading are giving an inside look at the billionaire's budget. A handwritten note from Ellison's accountant sets out expenditures: $194 million on a new yacht, $25 million on a villa in Japan and $20 million a year on "lifestyle."

Worried about your credit card bill? Ellison spent $75 million in interest payments on bank loans.


It seems, however, that Ellison paid little mind to the advice given by his accountant. He later went on a beachfront buying spree in Malibu spending $200 million on a string of luxury properties.

http://www.cbsnews.com/stories/2006/...n1271547.shtml

So you total all these one time expenses up and they're less than a Billion! - Still got 16 Billion left, which is still a pretty nice lifestyle! - I don't think Larry will be eating Dogfood.

Not to mention, the money that he spent on real estate will probably increase enough to fund everyone's retirement on this forum and then some. I think he needs a new accountant!
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!
Old 02-01-2006, 09:21 PM   #6
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!

Maybe he doesn't need any accountant!
He's also selling (or has already sold) his Woodside Japanese style compound for somewhere in the hundreds of millions.

He seems to know what he's doing.
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!
Old 02-01-2006, 10:03 PM   #7
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!

Quote:
Originally Posted by Cut-Throat
JUst saw a story on the news about Larry Ellison of Oracle being warned about spending too much money by his accountants. His Net worth in Oracle is Worth 17 Billion. They said he was burning up cash at the rate of $55,000 per day.
Maybe the accountants are paid as a percentage of assets under management. If his net worth dropped from $17B to $16B, that's nearly a 6% pay cut.

How could they possibly make their yacht payments or feel good about awarding themselves bonuses under those conditions?

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Re: Larry Ellison of Oracle Burning up Cash or maybe not!
Old 02-02-2006, 12:27 AM   #8
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!

Don't you just hate it when your accountant makes you stop buying yahts and houses in Malibu?
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!
Old 02-02-2006, 03:25 AM   #9
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!

He has zero diversification... all his net worth is in a single stock. I did some back of the envelope calculations when I first saw that article and IIRC guesstimated his Withdrawl rate at 2%, which is probably too high to have a very high confidence of safety.

But I think it's fair to say he has a heck of a lot more room to trim his expenses if need be than any of us will, and healthcare insurance won't be a problem for him.
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!
Old 02-02-2006, 09:35 AM   #10
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!

I wish I had his "problems".
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!
Old 02-02-2006, 09:56 AM   #11
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Re: Larry Ellison of Oracle Burning up Cash or maybe not!

Well, I would put the yacht in a 'one time purchase' and not think he will buy every year....

And, as someone said, the RE is probably going to increase (well, at least some will... I bet his house is worth a LOT less).

AND, if Oracle goes up a lot, then he makes a lot!!
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