Oracle's future: What's a yacht got to do with it?

Slate contributor Daniel Gross' assertion this week that when a CEO buys a yacht it's time to sell the stock doesn't hold water when it comes to Larry Ellison. Gross was comparing Legg Mason Value Trust CEO Bill Mason's recent purchase of a yacht with the mutual fund firm's poor performance of late. He went on to compare the performance of companies whose CEOs own the world's largest yachts - including Ellison. Indeed, many of the CEOs who Gross cites do appear to support this theory. But the CEO of Oracle Corp. isn't one of them.

As a recent Forbes story points out, over the long term Oracle investors have done quite well for themselves under Ellison's watch - and he owns the largest yacht in the U.S. The bigger problem for investors, according to the Forbes story, Irreplaceable, is succession. Ellison dominates at Oracle, and the enterprise software company doesn't have a deep bench to draw upon when he finally retires - or expires. "His two most senior aides are ill suited to the job," the story says, while others with the ambition and talent to be CEO either left or were eliminated when they clashed with him.

That fact, and the founder's well publicized risk taking behavior, didn't play into IT customers' minds when Ellison was younger. Now Ellison is about to turn 62.

It's not the fact that Ellison bought a new yacht that should worry investors - or IT organizations that use its products. It's what will happen if he finally takes one risk too many in sail racing - or if he suddenly decides to sail full time.