Dallas Mavericks owner and Shark Tank investor Mark Cuban participated in a Reddit AMA or Ask Me Anything at r/wallstreetbets posted by u/mcuban on Tue Feb 2, 2021. Click Hey everyone, Its Mark Cuban. Jumping on to do an AMA.... so Ask Me Anything to read the forum Q&A. I copy and paste sorted by Q&A (Suggested). Cuban answered 49 questions.
mcuban: Lets Go !
turdled: This is legit. Mark decided to start the AMA earlier.
mcuban: H/T to Spugliese for this question
Hey Mark! Thanks for doing this. What are your thoughts on which services to use? I'm planning on getting g out of RH for obvious reasons, any retail trading companies you'd recommend? I want to support free trade and hit Robinhood in the wallet for what they've done here. Also, any legitimacy to a class action suit against them?
Pick the brokerage with the strongest balance sheet. What ruined it on RH is that they didnt have enough cash to deal with the growth in accounts, margin loans and volatility. The EXACT SAME THING will happen at the next broker if you dont make sure they have a MULTI-TRILLION dollar balance sheet to be able to handle these kind of circumstances
And there will be class action suits. And they will be combined and they will win and you will get a check for less than $10
mcuban: Final thought. First thanks for the great questions. Thanks for changing the game. Thanks for taking on Wall Street. Thanks for making kids around the country if not the world( including my son and daughter). WSB changed the game far more than everyone on this board will ever get credit for.
That said, you will do all this again. You will go after WS and the next time you will be smarter. There was only one thing that messed you all up: RobinHood and the other zero commission brokers that everyone used didnt have enough capital to fund the fight. They let you down in a big way.
When you load back up, fight a broker with TRILLIONS OF DOLLARS in assets on their balance sheet. Someone that can be there when the fight starts and wont blink an eye.
No disruption is easy or happens in a straight line. Stay with it. I am a believer
pinklips_indy: Why is the stock plummeting so much?
mcuban: Supply and Demand, but in this case it literally could be because the source of demand has been crippled . When RH shut it down, then cut it back, lets put aside why, they cut of the greatest source of demand. They created a RobinHood Dive. No RH buyers, means sellers lower their price to find buyers. And they keep on lowering it till they find buyers. Keep the most natural buyers out of the market and the price keeps on FALLING.
Then that drop accelerates because the more the stock falls the more owners who bought on margin get margin calls. When that margin call happens, its brutal. They just take your stock, send you a fuck you note and sell your stock at the market price, no matter how low. They just want to get your cash to pay back the loan.
That then accelerates the selling.
Which then leads to what we are seeing in the market right now with GME in particular
So what to do ?
If you can afford to hold the stock, you hold. I dont own it, but thats what i would do.
Why ? because when RH and the other online brokers open it back up to buyers, then we will see what WSB is really made of. That is when you get to make it all work.
I have no doubt that there are funds and big players that have shorted this stock again thinking they are smarter than everyone on WSB.
I know you are going to hate to hear this, but the lower it goes, the more powerful WSB can be stepping up to buy the stock again. The only question is what broker do you use . Do you stay with RH , who is going to have the same liquidity problems over and over again, or do you as a group find a broker with a far, far, far better balance sheet that wont cut you off and then go ham on Wall Street.
Puddin-669: What are your thoughts on the volume of the last couple of trading days? And Also, what is your view on the practise of Naked shorting/Short Laddering?
mcuban: I actually love to see the companies I own shorted. If its a company I want to own, I know the shorts can be squeezed and if the company does really, really well, then the shorts will have to cover , creating more demand for the stock of the company I own, pushing the stock price up.
Back in the day I used to run a public company. I used to tell anyone and everyone i knew who didnt believe in us to short the stock
As far as naked shorting, thats not really a thing. Yes there can be more shares shorted than there are original float. That is by design. If i borrow a stock from you to short, and when I short it and your buddy buys it, then they can loan it to someone else to short, etc . All of those people who borrowed the stock paid to do so, and they realize that if enough people buy the stock and ask for the shares, they will get called in. So the chain of custody is there. The systems is doing what its designed to do.
So again, the more people shorting the stock in the company i own the better
Where you have to be careful is when the shorts are in a stock because the company is a fraud. If i short stocks, its only in companies i think are fraudulent and ripping off people . I actually produced a money about one element of this, The China Hustle
AChickenCannon: How do you think the SEC will respond to the GME situation? New regulations on retail trading?
mcuban: The SEC is a mess. I wouldnt trust them to do the right thing ever. Its an agency built by and for lawyers to be lawyers and win cases rather than do the right thing
If the SEC gave a shit about ANYONE other than Wall Street you would be able to go there right now and read bright line guidelines about insider trading, shorting, what is a pump and dump, what are the rules for cutting off the purchase of stocks like happened with GME et al
But they wont. They would rather litigate to regulate, which means they love to sue people in order to create new legal precedents.
All you need to know about the SEC and how badly they want to fuck the little guy is that they have the option of using JUDGES THAT WORK FOR THE SEC when they sue you rather than you have the option to have jury of your peers in front of a judge that is independent . Thats how bad the SEC is. If you want fair markets that doesnt benefit Wall Street call your local politician and show them this
CptThailand: Do you have an advice for people who have lost money the last few weeks and how to go on from this?
mcuban: I learned some expensive lessons when i first started trading stocks. It was painful. But i tried to learn what i got right and wrong. Right now, right here. The game is changing. The hard part is ask yourself if what you believed in has actually changed.
BTC HODLers are a great example to follow. Many bought at the highs in 2017 and watched it fall by 2/3 or more. But they held on because they believed in the asset.
The same applies to stocks. When I buy a stock I make sure i know why Im buying it. Then I HODL until till I learn that something has changed. THe price may go up or down, but if i still believe in the logic that made me buy the asset, I dont sell. If something changed that I didnt expect , then I look at selling.
fawkes0226: Would you ever consider opening a brokerage that's truly for the "little guys" like us? (Go Mavs BTW!)
mcuban: The challenge is not opening the brokerage, the hard part is dealing with success. What fucked up RobinHood is that they didnt have enough cash to handle the number of customers they had, their margin loans and the requirements from the DTCC. They have now raised more than $5 billion and that may not be enough. And its not like they are charging anything for their trades.
The question becomes whether or not buyers would pay a commission or even a tip to a broker for doing their trades. Crypto has no problem paying a transaction fee, you may have to do business with a broker that charges you so that you dont get fucked in a RH stop the buy type situation again
Competitive_Help_513: Hey Mark, given the maturation in public cloud computing and its impact on bringing down company startup costs, and the consequent rise in edge computing / distributed computing (ie a lot of compute capacity being built out globally, albeit not in traditional x86 architecture), when do you think we see grid computing (essentially public cloud business model on top of sensor meshes) finally become a thing? Anyone who can offer a "revenue stream on top of your capex" would have an AWS-esque business, no?
mcuban: Its starting to happen now. From mesh networks connected to traffic signals to much much more. Im an investor in a company called Mesh-Tek. they are putting their tech everywhere
as far as productizing , yes. anytime you can turn what you do inside of your company into a product you sell to the outside, that is something worth looking at closely
bigupsyaheard: What do you think could possibly change in the market after all of this is over? Any new regulations on your mind?
mcuban: What has happened the past few weeks with WSB has all happened before, it was just the big guys doing the battling. The only new thing was WSB traders took them on .
Volkswagen was the short squeeze that was even crazier at the time. Ackmen vs Icahn on Herbalife was similar to this, but it was big money vs big money
Momentum and technical trading have been going on forever, which really is what is happening now broken down into charts and graphs.
What i love about this now, is that if you pick your spots right and work as a group, you can hit again and again
men-swear: What single piece of advice do you have for us to succeed in shaking this up? Keen the language simple for *ape* friends
mcuban: Patience. Disruption is never easy or straight line. Is what you believe in still true. If it is, stay with it. If it's not, figure out what changed, learn from it and reload for the next asset . As always DO THE WORK. Assets including stocks move for a lot of different reasons. Trading stocks isnt easy. Trading Crypto, NFT, whatever, isnt easy. None of this shit is easy. You know what it is ? Its time consuming and brain consuming. And when you learn share. If you want to beat old school Wall Street you have to share that knowledge and find the power in numbers
DragLox: With this kind of volatility in the market, had WSB forever changed the way things will be done on Wall Street?
mcuban: Yes. WSB leveraged the value of community. They took it to the people and made it bottom up. There is so much power and upside in this. Sometimes its expensive to learn. Anyone who has traded for a while has learned an expensive lesson they couldnt afford. I know i have.
next time WSB will be smarter. And next time can still be around GME, AMC, etc.
There will be a point in the stock where wall street starts saying "I told you so", let that happen for a few weeks.
Then hit them again, at a broker with the financial strength to never have to shut you off
JazinAdamz: What do you think about the media. Lying about what Reddit wsb is talking and excited about. For me it showed that the world is evil and everyone is bought. I still trusted some media but u really can't trust any of it. Anyway , my question is do you think the Robinhood class action lawsuit has a chance?
mcuban: Its not about being evil. Its about being lazy. They write stories. They dont do much research. So you get stupid shit being stated about things they really dont understand
fjposter22: Is it in the realm of possibility that these hedge funds just, don't cover their shorts at all? They go full felon and act like it never happened, ala "Fake News!"?
mcuban: Their goal is to never cover their short. But that would take the company going out of business or being delisted. That wont happen here.
Best thing you can do is hold on to the stock and do business with GameStop. If everyone goes to their website and buys from them that is going to help the company which will help the stock which will help everyone here.
If you still believe in the reason you bought the stock, and that hasnt changed, why sell ?
ShitpostSundae: Hey Mark, loved your interviews with barstool, your work on shark tank, and your thoughts on rolling out direct payments during the pandemic. Any chance you want to be a board member of GameStop? Thanks, I'll hang up and listen.
mcuban: Im a fan of stimulus payments. I think the best investment our government can make is in the American people ., At 1pct interest rates, we can get a great return .
And GME already has an amazing board. Ryan Cohen brought in some of his peers from Chewy.com. He didnt put in his money to throw it away
Slimey_Cat_Logs: I lost 15k in BlackBerry and that shit is tanking hard. Do you believe it will rise in the future or am I holding on to a dead stock.
mcuban: i have no idea. No one really does. I do think that once RH and others open up buying some of these will pop up. I just dont know how much or if it will happen for sure.
I think the stocks are getting shorted because the shorts know that the natural buyers , the folks on RH and others like it are being prevented from buying, so that will make it most likely the stock will go down
People dont realize how shorts jumped in when they saw the buy side shut off
Jaykalia: Stepping away from gme for a min,
What are your thoughts on the stock market this year? I see the almost-unjustifiable prices of the many "popular" companies, and it makes it hard to keep money in the market or expand my portfolio. Any advice?
mcuban: interest rates change all valuations. What is right or wrong is hard to determine. What is the right valuation , that is what the market is supposed to tell you. Stocks that dont pay dividends are only worth what someone will pay for them
V3yhron: Hey Mark, thanks for doing this. Do you think the future of exchanges are decentralized direct peer-to-peer networks to eliminate the kind of nonsense we saw this past week?
Also, do you view the ball dropping of Robinhood as an indicator that there is room for disruption in a retail trading platform? Perhaps one intermingling brokerage platform and democratized discussions?
Thanks!
mcuban: I think block chain is the future, i dont know if its decentralized or private
DepressedBard: Mark, what do you make of the blatant market manipulation and short ladder attacks occurring right this very minute by the Hedge Funds?
mcuban: i dont think its manipulation. I think the rules are set to benefit them and they have years of experience exploiting those rules.
Your congress people can change the rules to make them fairer for small investors. They havent given a shit up till now. Maybe people on this board can change their minds
Golfer0808: Hey Mark, this all started because the short interest was around 140%. We are seeing today GME has dipped considerably because it is being reported that the short interest has dipped to 50% or lower. However, the volume numbers haven't spiked to suggest the shorts are covering their positions. What's going on? Is this fake news?
mcuban: The amount of volume to cover the shorts was tiny compared to the amount of volume in the stock on a daily basis.
Lawlshark: Hey Mark, long story short. To continue on this disruption path do you believe that the more that HOLD THE LINE will directly impact the price of certain stocks in the market?
Power to the little guys. *Not financial advice*
mcuban: yes. definitely. HODLing worked in CRYPTO. But it will take some Whales to act as a foundation
romax1989: What industry that is relatively small now has potential to explode in the next 10 years?
mcuban: De-Fi, NFT, but there will be a lot of ups and downs along the way
AI will change everything, but 99pct of the businesses out there that say they use AI are full of shit.
Precision Medicine, Nano Technology, the MRNA technology used in the vaccines will grow.
Robotics. Green Tech, all will grown
Sapandco: Hey Mark,
Thanks for doing this AMA. Do you have any favorite tools to use when doing company research that are accessible to small retail investors?
mcuban: SEC.GOV and Yahoo Finance and basic google searches are really all the work I do on a company. But i dont trade a lot any more. Being a day trader means being online ALL DAY
0MNIBU5: Hey Mark, do you think anything will come out of this from wallstreets side? Do you think they're going to change their fundamental strategies and habits when shorting? Or is this just going to continue and they're going to go unregulated?
mcuban: They will be on the message boards monitoring activity, thats for damn sure
fanelectric: Hello, first want to say I'm a big Luka fan, and still love for porzingus ( NYK fan here )
2nd, Do you think we can file a lawsuit against brokerages like Robinhood ETC ?
mcuban: Yes. There will be class action suits. And you will win. And after legal feeds you will get your $4.00 settlement check
Simplyme__: Hi Mark! I love you on Shark Tank! My question is what advice to you have for people following their dreams and starting from the beginning again? Thanks so much! :-)
mcuban: First, find a job to pay your bills. Got to take care of the basics. Then get back after it. Just remember, its not in the dreaming, its in the doing
WyooterHooter: What potential does wsb/social media investors have going forward? What steps can we take to organize and act as the world's largest hedge fund or something similar?
mcuban: being on this board is big. I think social investors have an opportunity to change stocks the way social was used to build crypto
uns0licited_advice: When you meet an entrepreneur, what are some characteristics in the person that make you believe he/she will succeed? What characteristics do you see in those who don't succeed?
mcuban: Love to Learn
Love to Sell
Be Nice
Bust your ass
Reduce the Stress of people around you
StefonDiggsHS: Mark don't hide I've seen your jumpshot, I've seen you splash corner 3's when you gonna suit up for the mavs to end this cursed losing streak? :(
P.s. been a MFFL and one of my happiest moments is the 2011 finals. Can't wait to cop tickets as soon as I'm vaccinated or it's safe!
mcuban: Hang in there. We will be good.
robertito42: Does the undercapitalization of brokers and collateral requirements of the DTCC make a case for a chain made of blocks?
mcuban: Yes. Stocks will be on the block chain in the future, and that will make the markets much more efficient, transparent and available to the small investor
blow_zephyr: Is it true that you were told to stop investing in everyone who came on shark tank because you were making the other sharks look bad?
mcuban: Its true i make them look bad. But its also true i wouldnt care what they said
Watch us friday nights on ABC ! (Im always selling)
lordeqai: Bro what's the best price to sell at? What price will this go up to until it stops?
mcuban: I typically dont set price targets on the up side. On the down side, when i was just getting started I would set a stop loss at where my margin call would start. If you can afford to hold a stock that is going down, only sell if the reason you bought the stock has changed
ReadThinkDoMore: Is there a proverbial "deep state" within the hedge fund world? What I mean is are there even shadier figures than the CEOs of hedge funds who give them their marching orders? I think there must be. Any thoughts mark?
mcuban: I dont know. I have met hedgies that are questionable, but i dont really do any business with hedge funds
xeonv2: Hi Mark,
Do you honestly think decentralized finance will be a reality given the possibility of big players pushing it from becoming mainstream?
mcuban: Father time is undefeated. Big Players die and are replaced by the next generation
JonSnerrrrrr: Mr. Cuban, I know that you help people on a rather regular basis. Could you light a fire under the ass of the SEC or would that be sticking your neck out too far?
mcuban: Google my name and the SEC
Erchez: Mark - thanks for jumping in here, what are your thoughts about all the hate from billionaires and VC against the "retail bros"?
mcuban: who cares what they say. Do what you think is right. Always
Jokosmash: Thoughts on employee-led investment rounds?
mcuban: LOVE LOVE LOVE it
I think there should be incentives for companies to give stock to EVERY single employee
scuba787: Can the little guy prevail ?
mcuban: absolutely. This shit aint supposed to be easy and its not. Changing the game is ALWAYS messy
NoahSavedTheAnimals: If you could tell your 20 year old self one thing, what would it be?
mcuban: Drink less, party more. Too many hangovers fucked me up
mark_nguyen45: Hi Mr. Cuban this is off topic but do you think we make the playoffs still this year? Our team on paper looks really good but I can see how covid really hurt us too. Also MFFL
mcuban: yes
smartaus: In what major ways will this change the future landscape of stocks?
mcuban: strength in numbers is a thing
HoldTheChimichanga: Mark. Why are they blocking me from buying my bananas??
mcuban: You arent part of the bunch . Why else ?
shady_brady69: Do you consider the Mavericks to be the greatest investment you've ever made?
mcuban: No. I bet on myself.
NineHDmg: My friends have paper hands.
What should i tell them?
mcuban: Dont play RPS Blogger's note: RPS means Rock, Paper, Scissors
redditster00: Which alt coins do you like?
mcuban: I own AAVE and Sushi, along with Eth, BTC and LTC
PathOfTHEERighteous: Are the mavs going to win the finals in the next few years?
mcuban: Fuck Yes
patmacog: Would you take becoming the primary owner of the Steelers if it meant selling your ownership of the Mavs?
mcuban: no
madmatthammer: Do you think anyone will go to jail over this?
mcuban: no.
Ishtastic08: What does Dirk smell like?
mcuban: money
TombOfTheRedQueen: Will you run for president in 2024?
mcuban: no
Update On A Past Blog
The Mark Cuban AMA reminded me of a blog I wrote on Dec 22, 2014 titled Tell Me You Games. The blog suggested how people can start a conversation. Also, the blog suggested ideas to start people socializing in a formal setting, a casual setting, or a group of friends who want to play a game talking only. The AMA is like the Write A Question tip. A person is chosen to answer questions from other people. The questions can be asked verbally or written on paper.
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