Oracle Corporation (ORCL) - Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K, dated February 2, 2026, details a material definitive agreement entered into by Oracle Corporation. The report covers the issuance and sale of 100,000,000 depositary shares, representing a 1/2,000th interest in Oracle's 6.50% Series D Mandatory Convertible Preferred Stock. The offering closed on February 5, 2026.
Key Financial Metrics and Transaction Details
- Instrument Issued: 100,000,000 Depositary Shares (ORCL-PRD).
- Underlying Security: 6.50% Series D Mandatory Convertible Preferred Stock.
- Liquidation Preference: $100,000.00 per share of Preferred Stock.
- Dividend Rate: 6.50% annual rate on the liquidation preference.
- Dividend Payment Dates: Quarterly on January 15, April 15, July 15, and October 15, commencing April 15, 2026, and ending January 15, 2029.
- Dividend Form: Payable in cash, shares of Common Stock, or a combination thereof.
- Underwriters: BofA Securities, Citigroup, Deutsche Bank, Goldman Sachs, HSBC, and J.P. Morgan.
Material Changes and Rights Modifications
On February 5, 2026, Oracle filed a Certificate of Designations with the Delaware Secretary of State, establishing the rights of the new Preferred Stock. This filing materially modifies the rights of existing security holders in the following ways:
- Dividend Restriction: No dividends or distributions may be declared or paid on Oracle's Common Stock or other junior stock unless all accumulated and unpaid dividends on the Mandatory Convertible Preferred Stock have been declared and paid.
- Repurchase Restriction: Oracle cannot purchase, redeem, or acquire Common Stock or other junior/parity stock unless the Preferred Stock dividend obligations are satisfied.
- Liquidation Priority: In the event of liquidation, holders of the Preferred Stock are entitled to $100,000 per share plus accumulated unpaid dividends before any distribution to Common Stockholders.
Conversion Terms and Outlook
The Preferred Stock is mandatory convertible. Unless converted earlier, each share will automatically convert on the second business day following the last trading day of the "Final Averaging Period" (the 20 trading days prior to January 15, 2029). The conversion ratio is variable, determined by the average volume-weighted average price of Common Stock during that period:
- Conversion Range: Between 499.8126 and 624.7657 shares of Common Stock per share of Preferred Stock.
- Depositary Share Conversion: Each Depositary Share converts into between 0.2499 and 0.3124 shares of Common Stock.
- Early Conversion: Holders of 2,000 Depositary Shares may elect to convert at the minimum rate of 499.8126 shares of Common Stock per Preferred share prior to the mandatory date, subject to exceptions.
Note: This filing does not provide specific revenue, profit, cash flow, or debt metrics for the company's general operations, as it focuses solely on the capital structure transaction.
Investor Verification Checklist
- Verify the total capital raised by calculating the offering price per Depositary Share (not explicitly stated in this text) against the 100,000,000 shares issued.
- Review the full Underwriting Agreement (Exhibit 1.1) for underwriting discounts, commissions, and any put/call options.
- Examine the Certificate of Designations (Exhibit 3.1) for specific "fundamental change" provisions that could trigger early conversion.
- Assess the impact of the 6.50% dividend obligation on future cash flows and the restriction on Common Stock buybacks.
- Monitor the Common Stock price trajectory leading up to January 15, 2029, to estimate the dilution impact of the mandatory conversion.