Oracle | $ORCL Stock | Slumps on Accounting Lawsuit


Oracle Corp. (NYSE: ORCL)


Shares of ORCL are trading lower in today’s session by over -4% after the tech giant was hit with a lawsuit from a whistleblower over questionable accounting procedures. Former finance manager, Svetlana Blackburn, claimed she was coerced to clean up the cloud accounting service numbers appear better than they really were. Interestingly enough, ORCL came out with the following statement earlier yesterday morning that was released on Reuters ORACLE SAYS FORMER FINANCE MANAGER WHO SUED COMPANY “WORKED AT ORACLE FOR LESS THAN A YEAR AND DID NOT WORK IN THE ACCOUNTING GROUP”.


ORCL Technicals

ORCL Chart

Since the beginning of the year, ORCL is trading well off the January lows of $34 to $40, or up 17% prior to today’s news headlines. In more of a macro view, ORCL has been struggling with long term descending resistance since December of 2014. Today, ORCL is under pressure and has tested is 200 day moving average which has provided support for the time being. The 200 day moving average is a critical point for most stocks, especially the higher priced names. In the coming days, keep ORCL on watch for an opportunity as it makes a decision in direction using the 200 as a pivot.


Analyst Expectations

JMP Securities, a well-known investment management firm, had the following comments on ORCL.

We maintain our Market Underperform rating and $31 price target on Oracle Corporation as we are concerned in the longer term about competition from cloud platforms such as Amazon Web Services (AMZN, MO, $775 PT, Josey), Microsoft Azure (MSFT, NC), and Google Cloud Platform (GOOGL, MO, $904 PT, Josey). More immediately, there are two issues we think investors should keep an eye on: 1) some industry sources have suggested to us that Oracle plans to implement a sales restructuring on June 6, the first Monday after the end of its fiscal year, which could relate to the “operational transformation” that CEO Safra Catz mentioned on the company’s last earnings call on March 15; and 2) a former Oracle Sr. Finance Manager filed a complaint against Oracle on June 1 in the U.S. District Court for the Northern District of California alleging that she was wrongfully terminated by Oracle because she refused to “add millions of dollars in accruals to financial reports, with no concrete or foreseeable billing to support the numbers” in an effort to “bolster Oracle Cloud Services financial reports.”


About Oracle Corp.

Oracle Corporation (Oracle), incorporated on September 9, 2005, is a provider of enterprise software and computer hardware products and services that are engineered to work together in the cloud and in the data center. The Company’s offerings include Oracle database and middleware software, application software, cloud infrastructure, hardware systems including computer server, storage and networking products, and related services. The Company provides Oracle software and hardware products through its Oracle Cloud offerings, and its software and hardware products and related services are used to build internal clouds or on-premise IT environments. – Reuters