Mark Cuban Dismisses Elon Musk’s Twitter Struggles And Thinks Investors Won’t Face Another Dot-Com Catastrophe

Mark Cuban has stated that Elon Musk’s rocky start as the new owner of Twitter could be a case of teething pains, and he compared the Internet bubble to the run-up in technology stocks during the pandemic. The Internet bubble was much more ridiculous than the run-up in technology stocks during the pandemic.

The star of the television show “Shark Tank” and owner of the Dallas Mavericks argued that the dot-com bubble was filled with questionable businesses. On the other hand, investors have driven up tech valuations in recent years due to near-zero interest rates, years of outperformance by the Big Tech stocks, and a lack of compelling alternatives.

Cuban stated in an interview with journalist Eric Newcomer for his newsletter titled “Newcomer” that the “dot-com bust” included businesses that “should not have gone public.” “This is a correction because easy money pushed up prices and enormous market profits spurred private investments,” said one analyst. “The reason for the correction is that easy money drove up prices.”

The technology-focused Nasdaq index has experienced a decrease of 28% this year, which is reflective of the significant stock-price drops experienced by companies such as Amazon (-41%), Netflix (-51%), and Meta Platforms (-67%), which is owned by Facebook. Stocks in the technology sector have been sold down by investors as a result of the negative impact that inflation and rising interest rates have had on the industry’s growth prospects.
When that money evaporated, prices plummeted like a rock, according to Cuban. “But you don’t look at these businesses and wonder why they ever got their start,” she said.

The investor worth a billion dollars suggested the possibility of greater losses for already-depressed prices in the technology sector.

He continued by saying, “It’s simply a matter of determining where the bottom is.” “About which I have no idea whatsoever.”

Cuban also minimized the mayhem that occurred at Twitter during Musk’s initial weeks in his role as CEO. The social media corporation has been accused of allowing impersonation of official accounts, as well as conducting layoffs, and has both introduced and promptly abandoned new services. “Everyone will forget everything that is being said right now within a year, provided that it gets its foothold,” he remarked. “If it finds its footing.”

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Cuban went on to say that if Musk can allay the concerns of advertisers regarding the moderation of material and also keep users, then Twitter’s decreased cost base might place it in a better position than it was in before Musk seized control of the company.

In June, the tech entrepreneur who sold his startup company, Broadcast.com, to Yahoo in April 1999 for $5.7 billion made a prediction that rising prices, higher interest rates, and fears of a recession would lead to a painful shake-out in equities and digital assets. He was right about all of these things.

He predicted that “in stocks and crypto, you will see firms that were sustained by cheap, easy money — but didn’t have genuine business prospects — will go.” “In stocks and crypto, you will see companies that were sustained by cheap, easy money,” he said. Cuban has made the comparison between the rise in day trading during the epidemic and the dot-com bubble in the past. He has also cautioned investors in cryptocurrencies not to borrow more than they are able to pay back, as doing so nearly ensures that they would lose everything they invested.

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