Oracle booked sales before it delivered. Its stock lost roughly 80%.
Around 1990 Oracle booked revenue at contract signing. A restatement cut fiscal 1990 revenue to $916 million, it posted its first-ever annual loss of $12.4 million, and the stock lost roughly 80% of its value.
Transcript
Oracle's stock lost roughly 80% of its value. The cause was a choice about when to count a sale.
Around 1990, Oracle booked revenue when a contract was signed, not when the product was delivered. It kept the growth story intact.
Then came a forced restatement that cut Oracle's fiscal 1990 revenue by more than $50 million, to $916 million.
In fiscal 1991, Oracle posted its first-ever annual loss, $12.4 million. In January 1991, its bankers cut its credit line from $170 million to $80 million.
Oracle survived, and never filed for bankruptcy. But revenue pulled forward has to be paid back, in money and in trust. Count what you have delivered.
The records behind this video
Every figure in the video comes from this Decision Record, each with its sources.
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