Sunday, November 23, 2008

What is Mark Cuban Thinking?

There are obviously lots of different people, and kinds of people in the world.

Some people don’t care about much at all. They just do their thing, confident in their own opinion or caring so little about others’ opinions that being right or wrong bears no consequence.

Some people are very afraid of being wrong, so work very hard at being right. Why be wrong when you can be right? Something bad might happen.

Some people have a long history of being right – making good decisions and being successful in a very public way. Maybe the idea of being wrong for all to see is too distasteful to imagine. Maybe the idea of being proven right despite very long odds and conventional wisdom is worth taking on considerable risk.

I was explaining the Mark Cuban situation to someone the other day and we got to the question of “why?”. Cuban is being charged with insider trading and he is going to fight it and fight it hard. He can afford to but it is going to be public and expensive. Cuban had opportunities every step of the way to not be in this situation. In fact, it’s possible that he is happy to be here.

Without rehashing every detail, some of the inflection points are as follows:

- Cuban could have refused to receive material non-public information from the CEO of a company in which he had an investment
- Cuban could have chosen not to sell stock
- Cuban could have chosen not to write about it in a public forum (his blog)
- Cuban could have quietly settled by now. $750k is small change for him
- When responding to the charges, Cuban could have kept mum rather than immediately turning it into a he said/he said circus

Lots of investors would like to see the laws around PIPE solicitation and insider trading cleaned up. Cuban seems hell bent on making himself the poster boy.

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