Foreign with more than 8 million Twitter followers, a net worth of 5 billion dollars, and having been the star host on 13 seasons of Shark Tank there's no doubt that Mark Cuban is one of the most influential businessmen in the world. When Cuban purchased the Dallas Mavericks basketball team in 2000, his Fame expanded beyond the business Community turning him into one of the most famous men in America his popularity increased further still when he played the President in the hit sci-fi film Sharknado Subsequently, he has considered running for president for real. While Cuban has perhaps won the most valuable reputations in the world, there's also a dark side to his history that very few of his fans know about in this video. We'll take a deep dive into the more nefarious aspects of Mark Cuban's career to see exactly how he became a billionaire.

Numerous interviews Cuban has talked about his humble beginnings and his gravitation towards entrepreneurship from a young age. Cuban Grew up in a poor suburb of Pittsburgh Pennsylvania to a working-class family. His parents limited financial means forced Cuban to turn to entrepreneurial Endeavors to secure Pocket Change He did whatever odd jobs he could, going so far as to go door-to-door in his neighborhood selling trash bags. After graduating high school, he enrolled at the University of Indiana majoring in business with his parents.

Unable to fund his tuition, he needed to find ways of making money on his own. He gave disco lessons and even started a small unlicensed bar. It's all great to do something entrepreneurial to pay for your college tuition, but in a 2019 interview, he also admitted to doing something that raises eyebrows to stay the least In college, he had various business ventures including a bar, disco lessons, and a chain letter. Yes, I did I went to Indiana University and I had to pay for my own school I had to figure out every which way in order to do it.

The pain letter was my junior year. You buy the chain letter from somebody and then the letter is a list of 10 names. You give fifty dollars to the person you bought the letter from and you sent fifty dollars to the person at the top of the list. Scratch their name off, put your name at the bottom, then find at least 10 people to sell it to so that one by one your name Works its way to the top of the list.

Well, I did that and got my name to the top of the list. So what is a chain letter? A chain letter is a form of financial fraud. However, there's a big difference between the types of fraud that Bernie Madoff where Sam Bakeman Freed did versus the fraud that Mark Cuban admitted to doing investors in both Madoff Securities and FTX Had no idea that they were investing in a massive Ponzi scheme. They thought they were investing with a legitimate company.

This is called an untransparent Ponzi scheme. What? Mark Cuban admitted to doing was different. It was a transparent Ponzi Scheme The victims of a chain leader know that they are investing in a scam, but they hand over their money anyway. But how can this be possible? Here's how the Chain Letter Works someone comes up to you with an investment proposal.

He gives you a list of names. If you send five dollars to the first six people on this list, your name will move up one notch on the list every time the letter is remailed. Subsequently, after six iterations, your name will reach the top of the list and you'll get five dollar bills in the mail from dozens or even hundreds of people far exceeding your 30 investment. The problem with the chain letter is the number of participants increases exponentially.

After just nine rounds of iterations, you would need to recruit 10 million new people each sending five dollars of the chain to keep it afloat. After just three more iterations, you would need 13 billion new people to buy in, which is far greater than the world population. What ends up happening in practice is that the vast majority of participants hit dead ends. They pay the thirty dollars to buy into the scheme, but they can't find anyone else foolish enough to buy in after them.

The few people at the top like Mark Cuban make huge amounts of money on the backs of hundreds or even thousands of victims at the bottom of the pyramid. Chain letters are inherently fraudulent. Participating in a chain letter is a felony punishable by up to 18 months in jail in some states, but because this happened so long ago is beyond the statute of limitations and Cuban faces No Prospect of facing prosecution. Perhaps the most disturbing part about the GQ interview is how Cuban tries to justify his crimes.

I also sold it so that none of the people I sold it to lost any money because I would have felt horrible Cuban would have felt horrible if anyone he sold the Chain Letter to lost money. While this sounds like benevolence on his part, it actually makes things even worse because chain letters grow exponentially. The fact that none of his direct contacts lost money just means that there are even more victims down the line. Cuban Didn't care about the fact that he was victimizing people.

He just didn't want to know who the victims were. He said they did the chain layer to pay for his college tuition as if this were some kind of justification. This gives us a glimpse into the mind of Mark Cuban He has no qualms about doing whatever it takes to achieve his goals. By the late 1990s, the internet was starting to pick up steam and there is a huge explosion of new startups creating new web applications.

Prior to the internet, the only way to watch sports games was on linear television. This was fine for large games like the Super Bowl which were broadcast nationally, but many small local games were only broadcast on local TV channels. If you travel to a different city for vacation, for example, you would have no way of watching your hometown games when you were away. Cuban Saw the potential for the Internet to solve this problem.

He acquired a tiny company called Audionet and rebranded it as Broadcast.com The company bought commercial rights to local sports games and broadcast them over the Internet all across the country. While they did manage to get hundreds of thousands of users, within a few years, the company was burning huge amounts of money. It's unclear if the business model would ever be viable given the high cost of acquiring the commercial broadcasting rights. But none of that mattered because the.com bubble was in full swing.

Any business, no matter how flawed, could achieve astronomical valuations. So long as I had a.com attached to its name and Broadcast.com was no exception. Cuban's company ipo'd on the NASDAQ in 1999. at the peak of the bubble.

Within nine months, the internet giant Yahoo acquired the company for 5.7 billion dollars, giving Cuban a 1.4 Billion Dollar Payday Cuban knew that Yahoo was massively overpaying for his money losing company. That's why he agreed to sell it. The problem was Yahoo paid him in stock, not cash and he had a lockup period in which he wasn't allowed to sell. By this point, Yahoo's shares had become almost as overvalued as Broadcast.com shares, so the acquisition only traded one overpriced stock for another.

Unable to sell, he instead bought put options against Yahoo stock, which hedged the downside exposure. When Yahoo's share price inevitably crashed in 2001, the put options paid out big time and Cuban kept his 1.4 billion dollar. Fortune By 2002, just three years after the acquisition, Yahoo shut downbroadcast.com as they saw no realistic path to profitability for this cash burning. Machine by getting in on the ground floor of the.com craze and selling it at the right time, Cuban was able to amass a billion dollar Fortune without creating any sustainable value.

Thank you! There are a lot of billionaires. In fact, they're an estimated 2 700 of them across the world. Just having a billion dollars to your name isn't enough to become famous. You need to do something that gets your face in front of millions of people.

Cuban's journey of Fame started when he acquired the Dallas Mavericks basketball team in 2000 for 285 million dollars. His public profile increased further still when he joined the hit NBC show Shark Tank as a co-host in 2011. he leveraged his success on Shark Tank to land more theatrical roles. This culminated in 2015 when he got an acting role to play the U.S President in the hit sci-fi movie Sharknado 3..

Having already achieved billionaire and Celebrity Status, the next logical step for Cuban was to get into politics. Around 2016, he started making frequent appearances in mainstream media channels giving his opinions about the upcoming presidential elections. and if Cuban could play the President in Sharknado why couldn't he do it in real life in 2017? Mark Cuban Was actively considering running in the 2020 presidential election. He decided against it, supposedly because his family was against the idea.

His decision not to run was probably for the best. Given his admitted criminal history, it's hard to imagine he could have garnered more than one or two percent of the vote with his Presidential Ambitions failing before they even began Cuban turned his attention to cryptocurrencies to get an understanding of why Cuban was so bullish on crypto. Take a listen to this clip of him in early 2021 explaining his rationale: you know, kids today, younger generation look at things differently and I think what's really altered my perspective on it is what's happened in the The Crypto Market you know, huddling? hold on for dear life as has worked for a period. Maybe this, maybe you know Bitcoin Ethereum Etc will will go down again.

but at the same time we're starting to see the evolution of applications on blockchain that are really starting to build marketplaces. and I think younger kids you know Gen Z in particular, maybe younger Millennials have a different approach to you know how they look at stores of value, how they look at how assets are priced. Then we looked at traditionally and let me just add, look, you know the narratives um, that we create to sell stocks, price, earnings right? discounted cash flow? Those are all subjective, You know we. We just have been told by Wall Street that if the lower the price earnings ratio against your your growth rate, then that's an indicator that the Stock's going to do great things you know or Graham and Dodd in terms of asset valuation.

and you know that doesn't necessarily hold in a digital environment the same way it did in the past. According to Cuban outdated valuation metrics like price to earnings multiples are no longer relevant. The younger Generations invest based on hype and price momentum. It doesn't matter if Bitcoin has no fundamental utility, as long as people keep thinking the price will go up, you can sell it to a greater fool for a higher price.

This way of thinking is nothing new. People thought the same thing during the Dutch tulip Mania of the 1600s as well as the.com bubble of 1999. Cuban should have known this better than anyone else givenbroadcast.com's history. It's even more surprising that even as late as 2019, he was openly skeptical of Bitcoin going so far as to say as zero intrinsic value.

Boom! If you're really into providing the opportunity for people to grow their net worth, why they hate for Crypto Ico is the new IPO Here's the thing about crypto, particularly Bitcoin Bitcoin is worth what somebody will pay for it. Do you ever see someone who collected baseball cards and they were really, really, really proud of their baseball cards because they kept on saying they were going to go up in price. Comic books. same thing, even artwork.

There's no real intrinsic value. You can't eat a baseball card or shouldn't need a baseball card. Artwork might look good on the wall, but not much you can do with it. Bitcoin there's even less you can do with it at least I can look at my baseball card and go, oh, that's my favorite player that's Roberto Clemente I Can look at artwork and go.

Wow! Crypto is the key that is so complicated for 99 of the population to put it in the device. Do you print it out? How do you keep from being hacked? Who's going to host it for you? It's just so difficult that it's only worth what somebody will pay for it. So what was behind this change of heart? It could have been that I saw a massive money making opportunity for himself. in October of 2021.

The Dallas Mavericks signed a sponsorship deal with a Crypto lending company Voyager digital. The terms of the deal were not disclosed, but given the size of the Mavs it was likely in the tens of millions of dollars. Voyager offered customers nine percent yields on stablecoin Holdings Cuban Told his fans that the nine percent return was almost risk-free This could not have been further from the truth. Voyager generated its yield by lending user funds out to weird crypto hedge funds like three arrows Capital Just a few months after sponsoring the Mavs Voyager digital went bankrupt and it is expected that depositors will only get back around 50 percent of their funds.

A nine percent yield doesn't do you much good when you have to take a fifty percent bankruptcy haircut. While the Voyager sponsorship probably costs Mavericks fans millions of dollars in losses, it wasn't even Cupid's most controversial crypto. Endeavor In or around 2021 if you've been invested in an Instagram page called at Nft, which had 1.7 million followers at its peak, at Nft promoted various Nft projects to its followers. According to the Twitter user, Space Cowboy at NFTA promoted scammy Nft projects, including many that purchased fake Instagram followers To gain the appearance of legitimacy, at Nft charged one hundred thousand dollars in promotion fees to display Nfts on their Instagram page and pump them in their Discord server.

They did not label their posts as paid advertisements as required by FTC regulations. You might not be surprised to hear that the majority of the Nfts they pumped ended up disastrously for their followers, with multiple of them being blatant rug pulls according to Space Cowboys analysis. Shortly thereafter, Instagram banned the Nft account for most billionaires like Jeff Bezos or Elon Musk. they became Rich because they created something of value for the world.

That's how a capitalist system is supposed to operate. Entrepreneurs are motivated to create something of value for society because they know it will make them rich. And if you create something that millions of customers find valuable, you can become obscenely wealthy. Mark Cuban has an estimated net worth of almost 5 billion dollars, but it's unclear what if any value he has created Broadcast.com was apparently not that valuable as Yahoo Shut it down after just three years after acquiring it.

Since then, his main contributions have been appearing on Shark Tank and getting involved with a few Shady crypto projects. This all just goes to show that our capitalist economic system is not perfect. Every once in a while somebody can become a billionaire just by being in the right place at the right time. Alright guys, that wraps it up for this video.

What do you think about Mark Cuban Would you vote for him if he runs for president? Let us know in the comments section below. As always, thank you so much for watching and we'll see you in the next one. Wall Street Millennial Signing out.