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0 pointsbdcravens8y ago0 comments

Cuban's stake in Broadcast.com's was worth about $100M before they sold to Yahoo, and since the sale to Yahoo, he's managed to over double his net worth via the Mavericks and his business interests. He may not be Gates, but I think he's more than a lottery winner.

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16 comments · 5 top-level

dannylandau8y ago· 4 in thread

I think it was around $1.4B, not $100M -- https://en.wikipedia.org/wiki/Broadcast.com

bdcravensOP8y ago

That's the sale to Yahoo.

From that article: "After the IPO, the company was worth $1 billion, Mark Cuban was worth $300 million" (obviously a little more than the $100m I thought)

adventured8y ago

Broadcast.com had $100m in revenue for fiscal 1999. Maybe that's what you were thinking of.

Cuban's position was worth more on paper at its peak before the Yahoo acquisition. Broadcast.com was acquired for $130 per share, the high that year before the acquisition, was $144 per share.

Prior to the acquisition, the stock was trading at $118. Yahoo only paid a 10% premium. Cuban was worth over a billion dollars before the acquisition.

https://www.cnet.com/news/yahoo-broadcast-com-sizzle-after-d...

dannylandau8y ago

I think the issue that people have with Mark Cuban's accumulated wealth is that it was during the Internet Bubble, and the stock would have been worthless just a few months later. I think Yahoo basically discounted the price of Broadcast a year later to zero.

jondiggsit8y ago

Cuban had some very smart bankers at Goldman

raldi8y ago· 3 in thread

He would be wealthier today if he had immediately put everything in an S&P 500 index fund and spent the last 20 years ignoring it.

adventured8y ago

That's factually wrong.

The S&P 500 was 1300 when he sold to Yahoo. He received $1.4 billion of Yahoo (14.6m shares at $95/each). He had to pay taxes on clearing out that position as well, so you can safely assume his after tax position was more like ~$1.1 billion. He very solidly beat the S&P 500.

He's worth $4.08 billion today according to Bloomberg (ranked #500 on their global rich list). He has increased his net worth by nearly 4x.

The S&P 500 is at 2747. It has just over doubled since April 1999. He'd be missing a billion dollars if he had gone with the S&P 500, including any dividends.

He was better off with what he did, he beat the S&P 500 index fund. Not only did he make more money his way, he got to do what he wanted to with his money, such as buying the Mavericks.

bdcravensOP8y ago

Sure, though given his investments in startups etc he could easily have lost 90% of it.

the_cat_kittles8y ago

thank you. this is always something people forget. if you want to claim you are a good business man, you need to show that your businesses do better than an index fund.

plorkyeran8y ago· 2 in thread

Doubling your money over 18 years is a only 4% rate of return. Not terrible, but also not impressive.

adventured8y ago

His compound rate of wealth increase, post paying taxes on the sale, is around ~7.5%. That beats the S&P 500 over that time, which very few professional money managers can do.

$1.1 billion to $4.08 billion [1].

His primary business holding, the Dallas Mavericks, has increased in value from $285 million to $1.9 billion [2] (per the latest Forbes estimate). For that investment, he has seen a rate of value increase of about 11% per year. That investment stomps the S&P 500 massively (which was at ~1400 when the acquisition closed).

[1] https://www.bloomberg.com/billionaires/profiles/mark-cuban/

[2] https://www.forbes.com/sites/kurtbadenhausen/2018/02/07/nba-...

dcdanko8y ago

> His compound rate of wealth increase, post paying taxes on the sale, is around ~7.5%. That beats the S&P 500 over that time, which very few professional money managers can do.

Very few money managers that are accessible to people with less than 10^8 USD can beat the S&P after fees.

Bridgewater, (Ray Dalio's fund mentioned above) regularly gets 12.5% annual returns and they are most notable for being consistent, not high. Pre-2008 some investment banks were getting up to 20%.

A billionaire making 7.5% annually is fairly unimpressive if their goal was to make money (which it might not have been for Cuban).

pkaye8y ago· 2 in thread

Doubling an investment is not too hard over 20 years.

bdcravensOP8y ago

Except he sold his Yahoo stock pretty early so he then had to make decisions on how to invest and grow the cash.

pkaye8y ago

He just needs to get 4% yield per year to double it in 20 years.

jacquesm8y ago

8% will double your money in 9 years. It's been almost 20.

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0 comments

16 comments · 5 top-level

dannylandau8y ago· 4 in thread

I think it was around $1.4B, not $100M -- https://en.wikipedia.org/wiki/Broadcast.com

bdcravensOP8y ago

That's the sale to Yahoo.

From that article: "After the IPO, the company was worth $1 billion, Mark Cuban was worth $300 million" (obviously a little more than the $100m I thought)

adventured8y ago

Broadcast.com had $100m in revenue for fiscal 1999. Maybe that's what you were thinking of.

Cuban's position was worth more on paper at its peak before the Yahoo acquisition. Broadcast.com was acquired for $130 per share, the high that year before the acquisition, was $144 per share.

Prior to the acquisition, the stock was trading at $118. Yahoo only paid a 10% premium. Cuban was worth over a billion dollars before the acquisition.

https://www.cnet.com/news/yahoo-broadcast-com-sizzle-after-d...

dannylandau8y ago

jondiggsit8y ago

Cuban had some very smart bankers at Goldman

raldi8y ago· 3 in thread

He would be wealthier today if he had immediately put everything in an S&P 500 index fund and spent the last 20 years ignoring it.

adventured8y ago

That's factually wrong.

He's worth $4.08 billion today according to Bloomberg (ranked #500 on their global rich list). He has increased his net worth by nearly 4x.

The S&P 500 is at 2747. It has just over doubled since April 1999. He'd be missing a billion dollars if he had gone with the S&P 500, including any dividends.

He was better off with what he did, he beat the S&P 500 index fund. Not only did he make more money his way, he got to do what he wanted to with his money, such as buying the Mavericks.

bdcravensOP8y ago

Sure, though given his investments in startups etc he could easily have lost 90% of it.

the_cat_kittles8y ago

thank you. this is always something people forget. if you want to claim you are a good business man, you need to show that your businesses do better than an index fund.

plorkyeran8y ago· 2 in thread

Doubling your money over 18 years is a only 4% rate of return. Not terrible, but also not impressive.

adventured8y ago

His compound rate of wealth increase, post paying taxes on the sale, is around ~7.5%. That beats the S&P 500 over that time, which very few professional money managers can do.

$1.1 billion to $4.08 billion [1].

[1] https://www.bloomberg.com/billionaires/profiles/mark-cuban/

[2] https://www.forbes.com/sites/kurtbadenhausen/2018/02/07/nba-...

dcdanko8y ago

> His compound rate of wealth increase, post paying taxes on the sale, is around ~7.5%. That beats the S&P 500 over that time, which very few professional money managers can do.

Very few money managers that are accessible to people with less than 10^8 USD can beat the S&P after fees.

Bridgewater, (Ray Dalio's fund mentioned above) regularly gets 12.5% annual returns and they are most notable for being consistent, not high. Pre-2008 some investment banks were getting up to 20%.

A billionaire making 7.5% annually is fairly unimpressive if their goal was to make money (which it might not have been for Cuban).

pkaye8y ago· 2 in thread

Doubling an investment is not too hard over 20 years.

bdcravensOP8y ago

Except he sold his Yahoo stock pretty early so he then had to make decisions on how to invest and grow the cash.

pkaye8y ago

He just needs to get 4% yield per year to double it in 20 years.

jacquesm8y ago

8% will double your money in 9 years. It's been almost 20.

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