Larry Ellison has built the world’s second-largest fortune by holding on to his Oracle shares over nearly five decades, using leverage to raise cash. Ellison owns 1.16 billion Oracle shares, representing 41% of outstanding shares, far surpassing other tech billionaires’ individual stakes. He has pledged 277 million shares as collateral for personal loans.

Ellison has sold Oracle shares over the years but mostly to exercise options and pay taxes, netting $5.1 billion. Oracle’s share repurchase program has reduced outstanding shares by 36% in 15 years, boosting Ellison’s stake from 23% to 41%. Despite this, Ellison continues to spend record sums on real estate, sports, and other investments.

Ellison has funded various private companies, invested in Elon Musk’s ventures, and backed his son’s media empire. Recently, he backed Skydance Media’s purchase of Paramount for $8 billion and is reportedly supporting Paramount’s bid for Warner Bros. Discovery in a potential $70 billion deal. Ellison has also given hundreds of millions to philanthropy and plans to focus on the Ellison Institute of Technology.

To fund his spending while maintaining his Oracle stake, Ellison borrows heavily against his shares. Oracle’s governance committee allows Ellison more leeway than most executives, believing he has the financial capacity to repay loans without resorting to pledged shares. Ellison’s strategy contrasts with Oracle CEO Safra Catz, who has continued to sell her vested options.

Overall, the approach to managing a large stock position varies among tech founders and CEOs. While some, like Ellison, use leverage to fund other investments, others prefer holding onto their stakes for long-term growth. Borrowing against shares can provide cash and tax benefits, but private banks and wealth management firms stress the importance of considering risks and diversification to avoid over-leveraging.

Read more at CNBC: Larry Ellison $365 billion fortune breaks every rule of wealth management