Mark Cuban Just Revealed a Truly Stunning Thing About Amazon and Netflix. Here’s the 1 Big Lesson to Take Away by Inc.com

“Mark Cuban Just Revealed a Truly Stunning Thing About Amazon and Netflix. Here’s the 1 Big Lesson to Take Away” | Written By: Bill Murphy Jr. / Inc.com

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Mark Cuban Just Revealed a Truly Stunning Thing About Amazon and Netflix. Here’s the 1 Big Lesson to Take Away

‘And to disclose, I have close to like, a billion dollars in Amazon stock.’

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Imagine being Mark Cuban: billionaire, flamboyant owner of the Dallas Mavericks, on-again, off-again potential presidential candidate, and “shark” on the popular TV pitch show, Shark Tank

You can do a lot of things. You can buy pretty much anything on the planet you want.

You can attend any event. You can gather a crowd and get them to listen to you — and you can probably invest in literally anything you want to. 

Given that last point, it might be a bit surprising to hear Cuban reveal that the two biggest investments he’s made are things that you, or I, or virtually anyone in America could make (albeit at on a smaller scale, I’m sure).

His disclosures came in two places. The first was during a frankly fascinating, hour-long discussion with Neil Cavuto on Fox Business News this week.

They got to talking about his single biggest investment by comparing its history to Peloton, which tanked in its IPO last week. 

In short, Cuban said he thinks Peloton is “emblematic of a bigger problem: companies that have to buy revenue, that think they can’t just grow organically.”

The exchange continues like this:

Cuban: “You’ve seen it with Uber. You’ve seen it with Lyft. I was wan investor in Lyft. 

Cavuto: When you say buy revenue, explain. Something to keep momentum going?

Cuban: So if you have to just keep on spending more money in advertising than you’re gaining in revenue …

Cavuto: But wasn’t that the Amazon model in the beginning?

Cuban: In the beginning, yes, but they were able to expand their business and increase their margins …

Cavuto: They were always cashflow posiitve

Cuban: They were for the most part. And to disclose, I have close to like a billion dollars in Amazon stock. It’s my biggest [stock].

Cavuto: You and me both. It’s so weird. It’s so uncanny.

Honestly, I feel like the analysis of what’s wrong with so many IPOs now is worth the price of admission here.

But let’s couple this together with the other source, which is an interview Cuban gave on CNBC a few months ago, in which he said that Amazon and Netflix were his two biggest holdings. 

“It’s been that way for years,” he said then, without disclosing the amounts involved at the time. However, he’s also revealed that he’s kept a lot of his estimated $4.2 billion net worth out of the market.

As he put it: ”a whole lot of cash on the sidelines.”

Fascinating. Granted, Cuban also has his hands (and his money) in a lot of startups. I don’t mean to suggest he doesn’t do enough for earlier stage ventures. Big parts of his interview with Cavuto were devoted to some of the challenges his companies face. 

And a year ago, my Inc.com colleague Emily Canal examined his record on Shark Tank versus other investors on the show, and found that the mere fact that he lent his name to a company could be a very valuable asset.

There’s a lot of talk about the idea that low interest rates have translated into easy money for startups (WeWork is often cited as a perfect example). 

However, out here in the fields, so to speak, where real entrepreneurs are still trying to raise seed money and early rounds, it can be a real slog. 

I suppose it’s easy for entrepreneurs to say that people like Cuban should be pouring more, higher-risk capital into much earlier stage startups.

And it’s hard to see the world through the eyes of a billionaire. 

Still, the idea that someone like Cuban can survey the entire world and come up with a strategy that’s basically FAANG minus three letters?

That’s something I find really surprising. 

And maybe just a little bit troubling, if you’re out there trying to raise money for a venture of your own.

Published on: Oct 2, 2019
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“Mark Cuban Just Revealed a Truly Stunning Thing About Amazon and Netflix. Here’s the 1 Big Lesson to Take Away” | Written By: Bill Murphy Jr. / Inc.com
October 2, 2019 at 12:38AM
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