Oracle sued for alleged lying to shareholders

Stefan Mileschin · 14th August 2018, 05:17

Coercion and threats were a silly business model

Shareholders have sued Oracle for, they claim, lying to them over cloud sales.

The investor leading the case, the City of Sunrise Firefighters' Pension Fund, claimed Oracle engaged in coercion and threats to sell its cloud computing products, creating an unsustainable model that fell apart.

The suit is seeking class action status and was filed in San Jose, California. The Florida-based firefighter pension fund and other investors lost money when Oracle’s stock plummeted in March after reporting a disappointing earnings report and outlook, according to the lawsuit.

Oracle said that the suit has no merit and the company will vigorously defend itself against these claims.

The background behind the case was that Oracle tried to pivot its cloud computing software and services to catch up to rivals Amazon.com and Microsoft. It launched launched cloud products and thought it could converting existing customers who currently run Oracle’s software on their own corporate servers.

However it did not really work and Oracle stopped disclosing specific cloud sales metrics as of June, giving investors less insight into its transition to internet based software.

The case claims Oracle’s executives lied in forward-looking statements, which are never guaranteed, during earnings calls and at investor conferences in 2017 when they said customers were rapidly adopting their cloud-based products and cloud sales would accelerate.

The firefighter pension, which manages about $143 million for 235 participants, alleged that Oracle used software licence audits and weakened existing maintenance programmes to compel customers to buy the cloud products.

“Oracle drove sales of cloud products using threats and extortive tactics. The use of such tactics concealed the lack of real demand for Oracle’s cloud services, making the growth unsustainable (and ultimately driving away customers).”

These tactics weren’t known to investors and were “expressly denied by the company”, it added.

https://fudzilla.com/news/memory-and...o-shareholders

14th August 2018, 05:17	#1
Stefan Mileschin [M] Reviewer Join Date: May 2010 Location: Romania Posts: 148,738	Oracle sued for alleged lying to shareholders Coercion and threats were a silly business model Shareholders have sued Oracle for, they claim, lying to them over cloud sales. The investor leading the case, the City of Sunrise Firefighters' Pension Fund, claimed Oracle engaged in coercion and threats to sell its cloud computing products, creating an unsustainable model that fell apart. The suit is seeking class action status and was filed in San Jose, California. The Florida-based firefighter pension fund and other investors lost money when Oracle’s stock plummeted in March after reporting a disappointing earnings report and outlook, according to the lawsuit. Oracle said that the suit has no merit and the company will vigorously defend itself against these claims. The background behind the case was that Oracle tried to pivot its cloud computing software and services to catch up to rivals Amazon.com and Microsoft. It launched launched cloud products and thought it could converting existing customers who currently run Oracle’s software on their own corporate servers. However it did not really work and Oracle stopped disclosing specific cloud sales metrics as of June, giving investors less insight into its transition to internet based software. The case claims Oracle’s executives lied in forward-looking statements, which are never guaranteed, during earnings calls and at investor conferences in 2017 when they said customers were rapidly adopting their cloud-based products and cloud sales would accelerate. The firefighter pension, which manages about $143 million for 235 participants, alleged that Oracle used software licence audits and weakened existing maintenance programmes to compel customers to buy the cloud products. “Oracle drove sales of cloud products using threats and extortive tactics. The use of such tactics concealed the lack of real demand for Oracle’s cloud services, making the growth unsustainable (and ultimately driving away customers).” These tactics weren’t known to investors and were “expressly denied by the company”, it added. https://fudzilla.com/news/memory-and...o-shareholders

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