ORACLE CORP 8-K

What Happened
Oracle Corporation announced that it entered into an underwriting agreement on February 2, 2026 and closed an offering on February 5, 2026 of 100,000,000 depositary shares, each representing a 1/2,000th interest in a share of its 6.50% Series D Mandatory Convertible Preferred Stock. The Certificate of Designations establishing the preferences and rights of the preferred shares was filed with the Delaware Secretary of State and became effective February 5, 2026. Oracle also entered into a Deposit Agreement with Equiniti Trust Company, LLC to issue depositary receipts for the depositary shares.

Key Details

• Offering: 100,000,000 depositary shares issued and sold; each depositary share represents 1/2,000th of one preferred share — implying an aggregate liquidation preference of $5.0 billion (50,000 preferred shares × $100,000 liquidation preference each).
• Dividend: Preferred stock accumulates dividends at 6.50% per year on the $100,000 liquidation preference, payable quarterly (Jan 15, Apr 15, Jul 15, Oct 15) beginning April 15, 2026 and ending January 15, 2029 (if not earlier converted).
• Conversion: Unless earlier converted, each preferred share will automatically convert after the Final Averaging Period into between 499.8126 and 624.7657 shares of common stock (each depositary share converts into 0.2499–0.3124 common shares), with conversion determined by a 20-day VWAP calculation prior to January 15, 2029; limited earlier conversion rights are provided.
• Shareholder priority: While any preferred shares remain outstanding (subject to exceptions), Oracle will not declare dividends on, repurchase, or otherwise acquire common or junior stock unless all accumulated unpaid dividends on the preferred have been addressed.

Why It Matters
This transaction raises a large amount of preferred-equity capital for Oracle while setting terms that can limit near-term returns to common shareholders (dividend and repurchase restrictions) until preferred dividends are satisfied or the preferred converts. The mandatory conversion feature means the preferred will convert into common shares based on future stock price averages, potentially increasing Oracle’s outstanding common shares in early 2029 (or upon earlier permitted conversion), which can affect per-share metrics. Investors should note the 6.50% dividend accrual, the conversion range, and the timing (automatic conversion tied to a VWAP period before January 15, 2029) when assessing dilution and income implications.