Thursday, June 22, 2006


Today Oracle made the headlines by reporting stronger than expected revenue. To me, this seems like one of the few tech giants that's actually going forward at a robust pace. They are growing through acquisitions, but the important thing is that they seem to be making these acquisitions work. The merging of two companies can turn out to be a costly mistake, but ORCL seems to be making their purchases work. The other news story is that they are taking market share away from SAP and IBM. Depending on the product line, SAP is a strong competitor with a nice-sized market share. It will be interesting to see their earnings when they report on July 20th.

Oracle is also continuing their stock buyback program, but I haven't read or looked into the net effect of their buybacks. Some companies issue press releases stating they are starting a $X buyback program. Some people view this as good news, while others view it as poor news. It all depends on the company and the sector. If a slowly growing company is buying back stock that can be seen as a good thing, but if a really fast growing company is buying stock that can be seen as a bad move because it should be investing its money internally. Anyway, back to my point. A company might state a big buyback but after you take into account shares given for options andn shares as part of acquisitions (they might buy a company for 80% cash and 20% stock), the net effect of the buyback might not be all that spectacular.
I didn't see anything mentioned with ORCL, but I'll be on the look out.

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