Oracle announced its largest acquisition to date

On July 28, 2016, Oracle (ORCL) announced the acquisition of NetSuite for $9.3 billion. Oracle is paying roughly $109 per share for each NetSuite stock, which is a 19% premium to NetSuite’s closing stock price of $91.57 per share as of July 27, 2016.

NetSuite’s acquisition is the largest acquisition Oracle has announced after PeopleSoft acquisition for $10.3 billion in 2004.

Why Did Oracle Announce the Acquisition of NetSuite?

NetSuite is the sixth acquisition Oracle has announced in 2016. Prior to NetSuite, Oracle announced the acquisition of Opower, Crosswise, Textura, Ravello Systems, and AddThis. Crosswise and AddThis were acquired to augment the company’s position in the data cloud and marketing cloud spaces.

Please read Is Oracle’s Buyout of Opower a Sign of Acquisitions to Come? to know more.

Oracle aims to strengthen its position in cloud with NetSuite acquisition

According to Synergy Research’s recent estimates, cloud infrastructure service revenues in 1Q16 have surpassed the $7 billion landmark. Amazon (AMZN) continued to rule the cloud space with a 31% market share, followed by Microsoft (MSFT), IBM (IBM), and Google (GOOG) (GOOGL), which collectively accounted for 22% of the cloud space.

Apart from these four players who collectively rule more than half of the cloud space, the next 20 players, which include Rackspace (RAX), Oracle (ORCL), Salesforce (CRM), and VMware (VMW), grew 41% on average on a yearly basis. These 20 players collectively held 27% of the cloud space.

On the surface, the growth posted by the 20 players mentioned earlier in the series looks promising. However, when we compare their growth figures with the growth in the overall cloud space, it doesn’t appear to be satisfactory. Synergy Research estimates show that the cloud space is growing at a rate of more than 50% while these 20 players, including Oracle, reported average yearly growth of 41%, indicating that they are losing market share.

This explains the rationale behind Oracle’s recently announced acquisition of NetSuite.

Latest articles

Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.

The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.

Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.

Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.

14 Jun

IEA Again Slashes Its Oil Demand Growth Estimate

WRITTEN BY Rabindra Samanta

As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.

Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.

172.31.38.64