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Oracle dips on rumors
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November 2, 2000: 2:27 p.m. ET
Database company quickly denies that its CEO and CFO are leaving
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NEW YORK (CNNfn) - Database and business applications maker Oracle Corp.'s stock dipped in heavy trading Thursday afternoon after false rumors circulated that its CEO and CFO were leaving.
Oracle said Thursday rumors about the departure of Chief Executive Larry Ellison and Chief Financial Officer Jeff Henley were untrue, and that both executives were remaining with the company.
"Both are staying and couldn't be more energetically engaged in the business. Rumors are categorically, absolutely untrue," a spokesman said.
Even after Oracle (ORCL: Research, Estimates) quashed the rumor, the company's stock remained down $2.37 at $29, a 7.6 percent dip, on volume of 105 million shares in mid-afternoon trading. It was the most actively traded stock on the Nasdaq.
 The rumors seemed absurd on the surface, since Oracle has posted very strong sales and earnings growth this year and Ellison's career has revolved around the company, which he co-founded in 1977. In addition, Ellison owns about $39 billion worth of Oracle stock at current market prices, making a separation between him and the company hard to envision.
Oracle's stock has been weak since late September, having dropped about 26 percent since then. Some of the weakness was triggered by concerns about its valuation and the growth rate of its non-database applications, such as those used for Customer Relationship Management.
"It's still an expensive stock," Francis Gannon, a portfolio manager at SunAmerica Asset Management, said on CNNfn Thursday. "The mid-20s would be a good entry point for buying Oracle stock."
Banc of America comments
Separately, Banc of America Securities analyst Bob Austrian issued a research report Thursday commenting on the weakness in Oracle's shares. In the note, Austrian said that there is some anecdotal evidence that conditions for the company's database business are "slightly tougher than we might have expected this quarter."
"We're hearing that database demand may be experiencing some negative pressure from the bursting of the Internet valuation bubble this year and its influence on database demand from so-called dot.com businesses," Austrian wrote. "At the low end of the market, this tends to influence unit sales more than revenues, but it is a factor."
Austrian continues to expect that Oracle will report 18 percent year-over-year growth in database revenue in the fiscal second quarter, to $770 million. However, "our take-away today is that there's slightly more risk to these estimates and potentially less upside," he wrote. 
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