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Well, that didn't last long. Billionaire investor and Dallas Mavericks owner Mark Cuban has dumped his Facebook stock less than a month after he gobbled up 150,000 shares in three separate 50,000-share purchases — the first at $33, the second at $31.97, and the last at $32.50. "I took my hit, my thesis was wrong," conceded Cuban. "I thought we'd get a quick bounce just with some excitement about the stock." Cuban likened the transaction to trading baseball cards. "It was gambling money, to be honest with you," he said. Facebook today closed at $31.41, down about 17 percent from its $38 IPO price.
Well, that didn't last long. Billionaire investor and Dallas Mavericks owner Mark Cuban has dumped his Facebook stock less than a month after he gobbled up 150,000 shares in three separate 50,000-share purchases — the first at $33, the second at $31.97, and the last at $32.50. "I took my hit, my thesis was wrong," conceded Cuban. "I thought we'd get a quick bounce just with some excitement about the stock." Cuban likened the transaction to trading baseball cards. "It was gambling money, to be honest with you," he said. Facebook today closed at $31.41, down about 17 percent from its $38 IPO price.
I like how at the end he says if Facebook hadn't sold more shares it would be worth $200/share... as if if they had sold fewer shares the IPO price wouldn't have been higher.
He was betting on the pent-up demand present in IPOs. He references LNKD. Honestly, I find it hilarious. We regularly people don't have access to IPO pricing, so it's irrelevant what the IPO price is. LNKD was grossly undervalued, opened at $80 from $45. Apparently, douche bag Cuban thinks his money entitles him to buy unfairly valued companies and screw the people that actually add value so he can profit off a guaranteed short-term gain when the under priced IPO shoots from $45 to $80 in a day. Ridiculous. And then he blames high-frequency day traders for his losses.
To be fair, the article seems to indicate that he didn't get any sort of special IPO pricing, it indicates that he bought Facebook on the open market AFTER it began trading.
"....less than a month after initially disclosing he had built a position in the company following its bungled initial public offering."
He was just a trader gambling on a short-term pop and he lost. No 'special rules for rich people' stuff going on here at all. It's only news because his short term trades are much larger than ours and he has easy media access whenever he wants to talk about something.
Ah, okay looks like he got in at around $31-33 instead of IPO pricing at $38.
Quote:
5. And in the interest of disclosure I bought 150k shares of FB. 50k shares at 33, 50k shares at 31.97 and 50k shares around 32.50. Its a trade, not an investment. Kind of like buying a Mickey Mantle, a Hank Aaron and a Barry Bonds Rookie Card knowing there is a card show in town next week
I don't think much of his analysis. He might buy based purely on emotion, but that's not how most people invest. But as he says, he's wasn't an investor but a trader. Traders (day, high-volume types) make up about 15-20% of the volume, the other 80-85% is made of investors who do look at fundamentals. That's why I stuck the hell the way from Facebook and Linked In. There's also Pandora, which has disclosed it makes way more on mobile advertising than computer. I suspect that's because people inadvertently click on the ads (I know I do) on their smart phones but not on the computer. Advertisers might eventually catch on to that, but it's mostly pay per click still.
mark cuban is possibly the luckiest billionaire on earth. good for him that he got lucky, but i wouldnt value his advice too highly.
I agree 101% with that statement.
$5.5 billion for Broadcast.com turned out to be one of the worst deals Yahoo has done. Similar to MSFT was planning to pay $45 billion cash for Yahoo, but Jerry Young was just little more greedier than Mark Cuban, and you see the result.
Mark Cuban got average talent with billion dollars in the bank.
Not everyone understand the power of facebook. But as someone in the space, here's another fact to think about.
"35% of the top 10,000 websites in the world has integrated FaceBook widgets."
Facebook is more than facebook.com, it's an entire social media ecosystem. It's just missing that perfect revenue generation at the present time.
The business model is the same:
How can we create a platform the attracts lots of interactive users and than sell ad space.
Even if the TOP 35% have intergrated FB widgets, they have coders that can disintegrate when the fad ends.
People run these TOP companies and the people that run them are driven by emotion and hype just like you and I.
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