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Strategies & Market Trends : Bear! -- Ignore unavailable to you. Want to Upgrade?

To: Sean Collett who wrote (278)	11/12/2025 12:23:29 PM
From: Sean Collett	Read Replies (1) \| Respond to of 291

RE: ORCL It is interesting looking at the ORCL 10-K. I am no accountant so appreciate any discussion this creates. Because they adjusted the useful life as Dr. Burry noted, going from five to six years, this gave them a nice boost to earnings. According to their 10-K it gave them a boost to net income by $573M in the 2025 period. So if we take the $573M out of the net income this gives us $11,870M instead of $12,443M. This boost to net income then took EPS (using diluted shares of 2,866) from what would have been $4.14/s to $4.34/s - $0.20 or a 4.8% boost to reporting EPS. Now the point from Harhsu was that " I think general the market just skips both and goes straight to cash flow." but the issue is this then changes the cash flow reporting too because CFO starts with net income! The depreciation change then boosted net income which then gave a favorable impact to working capital changes as their 10-K reported: In total this improved cash flow from operations by $2.1B over 2024! If we use the un-adjusted net income of $11,870M then FCF would have been ($967M) instead of the reported ($394M) and the CFO improvement would not have been ~$2.1B but ~$1.6B. Hard to tell what impacts this would have to working capital but I think minimal so point seems to stand. They reported FCF of ($394M) giving a FCF as a % net income of -3% BUT if we use the net income of $11,870M this gives us FCF of ($967M) which is a % of net income of -8%! On June 17th the stock price closed at $208.18/s and by September 10th the stock moved up $137.54 to a high of $345.72 which would be a 66% gain in 85 days. This at a time where SBC has grown to $4,674M which is 22% of CFO. For comparison between 2019-2021 SBC as a % of CFO was averaging 12%. Side note: Sallie Mae launched a private credit partnership with KKR today. KKR expects to purchase a seed portfolio of private education loans followed by $2B in newly originated education loans annually for three years. Any Black Sabbath fans? Enjoy. "They say that life's a carousel Spinning fast, you've got to ride it well The world is full of kings and queens Who blind your eyes and steal your dreams It's Heaven and Hell, oh well And they'll tell you black is really white The moon is just the sun at night And when you walk in golden halls You get to keep the gold that falls" -Sean

To: Sean Collett who wrote (278)	11/13/2025 1:51:32 PM
From: Sean Collett	Read Replies (1) \| Respond to of 291

I continue to watch the events in private credit in amazement. Bloomberg ran this piece today on a loan for Medallia, Inc where Apollo valued the loan at $0.77 on the dollar and KKR values it at $0.91 on the dollar. Will the real slim Shady please stand up? I find two things interesting here; 1) the swing between high and low with Apollo currently valuing at $0.77 and FS KKR at $0.91 with the average price at $0.83 2) the rapid decline in the loan value since June 30th, 2024. Just June of 2025 Apollo had this priced at $0.87. Blackstone ($BX) originally led the loan which is for $1.8B and now has it marked at $0.82. "Some market participants say diverging valuations for companies coming under pressure show lenders are reaching different conclusions about how much they expect to recover on the debt and that they don’t necessarily have access to the same information from borrowers." This reminds me of something our Emcee once said to Michael Lewis “The borrowers will always be willing to take a great deal for themselves. It’s up to the lenders to show restraint, and when they lose it, watch out.” Keep your eyes on $KKR & $BX - I know I am. -Sean