Mark Cuban: Why the Current Tech Bubble is Much Worse than the Last One

Mark CubanInvestors frustrated with low interest rates are putting money into all kinds of companies in hope of getting a decent rate of return. Tech companies are one niche where a lot of money has flowed into, and created another investment bubble.

Mark Cuban wrote a commentary on why today’s Tech Bubble is worse than the 2000 version:

“I have absolutely no doubt in my mind that most of these individual Angels and crowdfunders are underwater in their investments… Why? Because these is ZERO liquidity for any of those investments. None. Zero. Zip.

“All those Angel investments in all those apps and startups. All that crowdfunded equity. All in search of their unicorn because the only real salvation right now is an exit or cash payout from operations. The SEC made sure that there is no market for any of these companies to go public and create liquidity for their Angels.

So why is this bubble far worse than the tech bubble of 2000? Because the only thing worse than a market with collapsing valuations is a market with no valuations and no liquidity. If stock in a company is worth what somebody will pay for it, what is the stock of a company worth when there is no place to sell it?”

That’s the best explanation of the Tech Bubble we’ve heard. And why you should be very cautious before investing your hard-earned money in any tech company with a nice-sounding story.