Mark Cuban discusses state of investing amid Reddit-fueled frenzy around GameStop

what do you actually own when you own a share of stock in apple well apple pays a dividend in a non-dividend paying share uh stock what rights do you have as a shareholder when you own a share of a company that doesn't pay a dividend do you if that company has a lot of discounted cash flow you know are they actually and they don't pay dividends and they're not growing and they're not investing maybe they buy some shares of stock back maybe they issue more options for for their executives but what do you truly own there was a point in time you know back in the day when you owned a share of stock you felt like you were an owner of the company now they have multiple classes of stock you don't really own anything you know what you own is the right to sell it to somebody else it is effectively a digital representation of you know of a share of stock that gives you the right to sell it or you know to buy it from somebody else and it's so you're saying that changes in all right so you're saying the changes in ownership structure i mean you're not you're not no longer a shareholder you're you just hold a trading instrument i mean that's sort of a dark view of it's not enough i mean if you go back to my blog post from the early 2000s i said the exact same thing right i haven't changed my position in all these years and supply and demand matters why do you think that you know brokerages have analysts that go out and make calls and go out on on cnbc and come on and talk about the the calls that they've made and the things that they see happening you know they want to create demand i mean the reality is they shouldn't if it was truly about ownership in the company no analyst should go out there and say anything because you want the stock to stay as low as possible so you can own more right you know it's well i mean whether you're a reddit trader or an institutional trader you crave research mark uh and that's what the that's what the banks sell that's what analysts sell uh there you see there's value in that no i'm not saying there's not value in it i'm saying if look if i'm a client of your research firm and i pay you for that great but when you go on cnbc and talk it up and talk up your book you're saying okay i'm creating more demand to create an exit to or just to you know and just to inflate the price when in reality if you truly were an owner and you had additional capital you'd want that price to be as low as possible because you want to own as much of the company as possible you know that's what warren buffet that's the way that's the gram and dodd approach you know keep that price down because it's undervalued so i can buy more but that's not what happens we go out and we get long and we get loud because everybody wants that price to go up because that gives them an outlet to sell it and i just don't see any difference between that and what wall street bets is doing now i understand your point that an analyst you know may have more training more background more you know hopefully not more information but at least be able to share that um and maybe somebody on on a message board does not and maybe they're just lying or pretending or whatever i get the difference there but at the same time the goal is the same to get long and get loud so mark is there a world in which you know gamestop can sustain a 20 billion dollar plus valuation and what is it then is it simply a store of value completely removed from fundamentals do you think they're going to see that with some of these other names then it really comes down to look if somebody like ryan cohen i don't know him at all um has had success with with chewie.com and he put up a lot of his own money and bought 12 13 of the company now he's truly an owner and owning that much stock he put himself on the board and he put other individuals on the board and he invested in a company that has about i don't know 30 35 of its sales um that are on e-commerce and so they're doing all they can to get away from being a store-driven mark you're talking fundamentals here no i am right i'm done i'm telling you no because you asked me about the future of the company itself right and so i told you there was a reason why somebody bought the stock right and invested i don't know how much money that ryan invested to to actually take ownership in the company and to actually influence the operations of the company that's one type of buyer and owner they that's great if you can buy enough for the individual trader it's just about the narrative right what's the narrative is ryan how do you how do you justify that i guess my original question is how do you justify 20 billion plus valuation you're talking fundamentals but when you're talking to the wall street vets group you're saying that it can keep going up and up again what is that based on it's based off of by supply and demand like anything else if you bring in what is gamestop what is gamestop is it just a store of value at that point yes like most like any non-dividend paying stock right look the idea of having a trillion dollar market cap in a company would have been laughable five years ago 10 years ago the idea that a company's market cap would go a trillion dollar company's market cap would increase 50 60 or 600 billion dollars and more than you know almost any other s p stock in months would seem incredible we would all would say the fundamentals could never support that right it's supply and demand how many buyers and how much money is chasing and now with low interest rates there's so much money chasing and dude this is nothing new right it's just nothing new at all and there was a time when if a company went from a hundred million dollar market cap to 700 million dollar market cap because of all the supply and demand you know and who knew where the demand came from it was just wow you know it that's crazy but it is what it is now it we're only like because it came from a message board shepard smith here thanks for watching cnbc on youtube

Channel: CNBC Television

Views: 409,005

Keywords: Squawk Alley, CNBC, business news, finance stock, stock market, news channel, news station, breaking news, us news, world news, cable, cable news, finance news, money, money tips

Id: rgQnkCWRh9o

Length: 6min 5sec (365 seconds)

Published: Tue Feb 02 2021