Mark Cuban: I wasn't telling anyone to buy more

Mark Cuban: I wasn't telling anyone to buy more

Mark Cuban, Dallas Mavericks proprietor, calls into ‘Squawk Alley’ to defend his feedback on Reddit’s ‘Ask Me Something’ about r/WallStreetBets and the Reddit-fueled market volatility. Subscribe to CNBC Professional to entry our stay Professional Discuss “Easy methods to Navigate the Reddit Market Mania” with Fundstrat’s Tom Lee and CNBC’s Mike Santoli:

Billionaire entrepreneur Mark Cuban advised CNBC on Tuesday that he believes the Reddit merchants who helped spark the GameStop brief squeeze and subsequent inventory surge will stay a drive out there.

“I all the time was taught, ‘You get lengthy and also you get loud,‘” Cuban stated on “Squawk Alley.” “You get on the market and create extra consumers on your inventory and the inventory worth goes up and that’s precisely what’s taking place right here, besides it’s simply WallStreetBets that’s doing the ‘getting loud.’”

Cuban’s feedback got here as GameStop shares have been plunging about 50% on Tuesday to round $111 every, at some point after shedding practically a 3rd of their worth.

The online game retailer’s inventory — which rallied 400% final week, reaching an all-time excessive of $483 per share at one stage — began hovering in response to a brief squeeze that occurred when on-line merchants on websites like Reddit’s WallStreetBets discussion board poured into the closely bet-against identify.

Cuban, who made billions of {dollars} through the dot-com increase, stated he believes these on-line traders have gained useful data from the brief squeeze, in addition to from the unstable cryptocurrency market. “I believe that is actual,” stated the “Shark Tank” investor and proprietor of the NBA’s Dallas Mavericks.

“I believe now that they’ve acknowledged their energy and now that they’ve discovered some classes, we’re going to get extra of it, not much less of it,” he added. “It’s not going to be a set of circumstances the place all these folks misplaced cash, they’re going to go dwelling with their tail between their legs they usually’re by no means going to do that once more.”

Brief promoting is a method during which an investor borrows shares of an organization after which promptly sells them, anticipating that the value will decline sooner or later. The brief vendor buys again the inventory at its cheaper price and offers again the borrowed shares, profiting off the distinction.

When the other occurs, like when on-line merchants rushed into GameStop, hedge funds and different traders who had shorted the inventory could attempt minimizing their losses by shopping for shares on the present increased worth. Each teams of traders buying the inventory provides to the upward momentum.

Cuban stated he believes a bigger shift is afoot amongst youthful traders. Not solely do they receive their info by means of totally different channels on-line, Cuban stated he thinks they could additionally method valuations with an alternate mindset after rising up “with an iPhone their total lives.”

“They put a premium on objects which might be digital,” he stated. “The concept that a digital buying and selling card or digital paintings might have extra worth than one thing tangible in our minds, or bodily, can be inconceivable to many individuals but to Gen Z, that’s what makes excellent sense.”

“On the subject of shares it’s the identical factor,” Cuban stated, suggesting there could also be much less of an emphasis on conventional valuation metrics resembling a price-earnings ratio. He stated his perspective has been altered by the crypto market, the place some traders have adopted the buy-and-hold mantra generally known as “HODL.”

That technique has “labored for a interval,” he stated. “Possibly bitcoin, ethereum, and so on. will go down once more however on the identical time, we’re beginning to see the evolution of functions on blockchain which might be actually beginning to construct marketplaces. I believe youthful youngsters, Gen Z particularly, possibly youthful millennials have a distinct method to how they take a look at shops of worth, how they take a look at how belongings are priced than we checked out historically.”

From his personal expertise, Cuban stated he believes that method can carry over into publicly traded shares. “I’ve by no means checked out proudly owning a share of inventory that doesn’t pay a dividend as the present discounted worth of future money flows,” he stated. “To me, that was all the time a story that brokers used to promote shares. To me, a share of inventory with out a dividend is rather like a baseball card. It’s what somebody can pay for it.”

  1. If you take the time and look at some of the due diligence work on wsb, its very thorough and thoughtful. When someone posts stuff that doesn't make sense, the collective comments call them out and poke holes in the thesis. I've learned more in a few weeks from these posts than I have all year as a stock trader

  2. You guys gotta switch up the playbook. This type of propaganda doesn't work on this generation. We see straight through it. Mark Cuban seems like a great guy btw. Hold!!!

  3. What a scum bag, Cuban is glad to see what's going on. People are going to lose all their money and they are never going to get it back. WOW when on shark tank the first thing YOU want to see is how much money the company is generating, now you are saying it's all subjective. Hey billionaire Cuban how about helping out the little guy that you caused to lose all of his money by telling them to hold the line.

  4. This is actually a joke. It’s hilarious how absolutely pathetic CNBC, CNN has become. But, I guess in a way, they’ve always been this way. Shame on all of you, for being crony puppets.

  5. sure the information is all out there, but if you don't have the intelligence and knowledge to use it somebody might as well be saying blah blah blah. this idea that everybody has equal information therefore will have equal outcomes is kind of dumb! people all sure can have the same information but smart people will be able to use that information and people that are not educated in the use of that information will be swayed by the voices of people that just sound like they know what they're talking about. I'm not saying that people should be protected from themselves, but the idea that just because information is available everybody should have equal outcomes that's kind of dumb. People need to be careful and understand what they're doing. That should be the message. The message should be you've got to learn to walk you're going to learn to crawl in fact before you walk and then run.

  6. OMG 😱 HODL
    The fundamentals are real
    GameStop can beat Amazon in the games category. Chewy beats Amazon in pets category. The guy who made Chewy has joined GameStop leadership


  8. I’m all in AMC, the retail investor has been manipulated by hedge funds since the beginning of the market until now. Buy for freedom and because they’re trying cheat the system with restrictions and limiting buying, Wall Street only caused a sell off making the little guy only sell or get burnt, while hedge funds get to play by different rules. Saying time for the little guy to sit out. Burn the dirty hedge funds betting against us to the ground or at least bankrupt them. We need everyone’s help, this is a war. We will win… AMC will be going parabolic but keep holding because Diamond 💎 Hands. PT $250+ The longer we hold, the more hedges have to cover huge. Making the sky the limit.. AMC is the 2nd highest shorted stock.. GAMA Squeeze is coming. 🚀✨🌙🎁💰💥🔥🙌🏻💎🏃💝

  9. When you see figures like Chamath, Cuban and Musk taking this viewpoint on the world that is changing amidst the push back of the old status quo of the market media. It makes you wonder how long it will take for the market media to realize, when you are the voice of the older few.. eventually you will be outweighed. The generation they cater to is declining in numbers, and the new wave will force networks like this to pivot or disappear. Talk about taking a bad position and holding LUL.

  10. Do as your told CNBC before the hedge funds pull your funding. Only reason I clicked this garbage channel link was to hear Mark Cuban, nothing else on your failing network matters.

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