Oracle and the Phantom Data Centers

Published by Idi Admin on

If you look at the events in the US natural gas industry in the past 20 ish years you see a pattern

  • investment in fracking of oil and gas seemed out of proportion
  • at many stages there seemed to be no way the companies would be profitable nor the banks recoop their loans
  • Then you see the US sabotage the Nordstream piple line and go to war with Russia. 

The most likely case is that those that really control the game in the USA had a plan all along.  Too much was hanging on this being successful……..

Now we see a similar behavior where so much is hanging on data centers.  Big money booked with circular financing based on data centers that have not been built yet.  There must be a plan.  But it may not be a very friendly one. It could be as Musk says everything will be damned near free.  Or it could be a Digital Gulag like had planed on prototyping in Ukraine.  

Breaking: Michael Burry exposes Oracle's accounting trick they've been using to inflate revenue

Burry claims "Oracle manufactured an extra 19% of revenue" through these steps:

1. A customer prepays Oracle $10B today for cloud capacity to be delivered 3 to 5 years from now

2. Oracle books that as an $11.9B contract liability, accreting interest at 6% over the wait

3. When Oracle finally delivers the capacity, it recognizes the full $11.9B as cloud infrastructure revenue against the original $10B

4. The extra $1.9B becomes revenue for capacity that was never used and work that was never performed

This would be bad news for 
$ORCL
 investors if true

 

 

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