Just how good an investor is Mark Cuban?
- Thread starter Pekelo
- Start date
he himself didnt think of this. it is common on every company sale to lockin during lockup. asset swaps, cfd, reversals ...
I thought most ipo's prohibited those shareholders under lock-up from using any sort of derivative. I mean I have read that in a lot of S-1's.
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I think you are right;
but another way = ''prepaid variable forward contract[...... bank or brokerage loan basically] '' I used one article which makes your point + adds mine =Keystone Wealth management, article.
He did. Lots of paper millionaire let their fortune melt away because they didn't think of something easy, like selling covered calls on their paper gains.
Now here is my accounting problem. If Cuban got only 1.4B and his partner got about half, (because that was their share at the IPO) that is only 2B. If the employees got another 1B we are still short of 2.7B.
Who got the other half of the 5.7B sale value???
This reminds me of:
https://en.wikipedia.org/wiki/Starmedia
Fernando Espuelas had like $500 Million, but he had NO clue how to use options on his shares, and he lost it all...
Thankfully, we still have the 90s music...
Great time to be around...
I took a 2020 ipo off the top of my head,Snowflake, and pulled up the S-1 just to check.
https://www.sec.gov/Archives/edgar/data/0001640147/000162828020013381/snowflakes-1a1.htm
Lock-up Arrangements
Our directors, executive officers, and the holders of substantially all of our common stock and securities exercisable for or convertible into our Class A common stock and Class B common stock outstanding on the closing of this offering, have agreed, or will agree, with the underwriters not to, during specified periods of time after the date of this prospectus, subject to certain exceptions, without the prior written consent of Goldman Sachs & Co. LLC, offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, or otherwise dispose of any of our shares of common stock, any options or warrants to purchase any of our shares of common stock or any securities convertible into or
131
exchangeable for or that represent the right to receive shares of our common stock. Under the terms of the lock-up agreements with the underwriters:
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This explains it all.
Form SC 13D Broadcast Com Inc
General statement of acquisition of beneficial ownership.
It's too long to post here.
https://sec.report/Document/0001047469-99-014241/
Thanks for the ant sized letters and 80% of the document crossed out, although still readable. But at least I got some good phone numbers out of it.
But anyhow, at the very end of the document, it seems Wagner owned almost twice (9.2 MM) as many stocks as Cuban (4.9 MM)??? At broadcast.com's IPO it was the other way around.
Here is Mark's answer from Quora about the option play:
Mark Cuban
Founder, B [ http://Broadcast.com ]roadcast.com
Answered September 17, 2011 ·
Originally Answered: How did Mark Cuban survive the dot-com crash?
"it was a collar i designed through Goldman Sachs after the lockup period. However during the lockup period, the tax rules allowed me to short an index in which Yahoo was under 5pct, so I found a couple and spent hard dollars shorting those internet oriented but Yahoo less indexes.
I lost 100pct of my money on that short, but it covered me till my lockup expired and allowed me to hedge my yahoo stock completely"
More explanation by others here:
https://www.quora.com/How-did-Mark-...ck-How-did-he-get-out-before-it-all-went-down
A very long explanation of Mark's collar that contradicts what he said above (about the underlying stock):
http://investmentxyz.blogspot.com/2006/05/cubans-collar-anatomy-of-famous-trade.html
Mark Cuban
Founder, B [ http://Broadcast.com ]roadcast.com
Answered September 17, 2011 ·
Originally Answered: How did Mark Cuban survive the dot-com crash?
"it was a collar i designed through Goldman Sachs after the lockup period. However during the lockup period, the tax rules allowed me to short an index in which Yahoo was under 5pct, so I found a couple and spent hard dollars shorting those internet oriented but Yahoo less indexes.
I lost 100pct of my money on that short, but it covered me till my lockup expired and allowed me to hedge my yahoo stock completely"
More explanation by others here:
https://www.quora.com/How-did-Mark-...ck-How-did-he-get-out-before-it-all-went-down
A very long explanation of Mark's collar that contradicts what he said above (about the underlying stock):
http://investmentxyz.blogspot.com/2006/05/cubans-collar-anatomy-of-famous-trade.html
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