Back in the late 1990s, Mark Cuban and his business partner Todd Wagner pioneered online streaming with their company Broadcast.com. They were ahead of the curve, offering what we now recognize as streaming audio and video long before YouTube and other platforms existed. By 1999, their innovative venture caught the eye of internet giant Yahoo, leading to a massive acquisition deal.
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Yahoo acquired Broadcast.com for a staggering $5.7 billion in stock, instantly turning Cuban into a billionaire, as he owned about a third of the company. But Cuban wasn't about to let his newfound fortune ride on the unpredictable waves of the dot-com bubble.
Even though the internet frenzy was in full swing, Cuban sensed that the market was unsustainable. The valuations of tech companies were soaring, but he knew it couldn’t last forever. Instead of getting carried away by the hype, he decided to protect his massive Yahoo stock holdings.
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Just weeks after Cuban's savvy move, the dot-com bubble burst, and the market crashed. As he told Howard Stern on his show, Yahoo's stock plummeted from around $300 to just $5. Had Cuban held onto his shares, he would have seen his $1.4 billion stake shrink drastically, potentially losing billions.
Mark Cuban’s ability to see the risks and act when others were swept up in the excitement of the tech boom led to what's now known, in his words, as "one of the top 10 trades of all time on Wall Street." While some of his friends and colleagues, who also owned Yahoo stock, didn't follow his advice and lost much money, Cuban's careful planning ensured he held onto his fortune.
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Because Yahoo’s stock went up briefly, some people wondered if he was missing out by selling his stock early, but Cuban didn't second-guess his decision. He famously said, "I've got two and a half billion – how much do you need?" This shows how he focused on keeping his money safe rather than getting greedy. It's a smart move that makes sense, especially in uncertain markets.
Although most of us aren’t billionaires like Cuban, we can still draw parallels from his experience during the dot-com crash. It should serve as a clear reminder of why protecting our money is essential, especially in unpredictable markets like those we saw a couple of weeks ago. Even though markets have rebounded now, his strategy offers important lessons for anyone looking to keep their investments safe from future crashes.
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This article Here's How Mark Cuban Protected His $1.4 Billion Fortune From The 2000 Dot-Com Crash – 'One Of The Top 10 Trades All Time On Wall Street' originally appeared on Benzinga.com
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