CNBC Transcript: Mark Cuban on Tesla going private with CNBC’S Scott Wapner Today
WHEN: Today, Monday, August 13, 2018
Where: Fast Money Halftime Report
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for Read More
Following is the unofficial transcript of a CNBC interview with Dallas Maverick owner Mark Cuban and CNBC's Scott Wapner on CNBC's "Fast Money Halftime Report" (M-F 12PM – 1PM) today, Monday, August 13th. Following is a link to video of the full interview on CNBC.com:
Mark Cuban On Tesla Going Private And The Markets
Scott Wapner: I’ve just been told that Mark Cuban has actually called into our control room to discuss this.
Jim Cramer: how is he doing?
Wapner: mark, are you there?
Mark Cuban: yeah, I’m here. What’s up, guys?
Wapner: talk to me about Tesla. How do you view this whole situation?
Cuban: I – look, when you invest in an entrepreneur, you get the entrepreneur. And Elon is quite the entrepreneur. So how can anybody expect anything different? And if you look at the great companies right now with the largest market caps, I mean apple -- Steve Jobs - everybody complained at one point or another about Steve. He got fired. You look at amazon, everybody complained about Jeff. Oh, “he” -- you know, “he is not trying to make any money. He’s not giving guidance. He is not doing this. He is not doing that.” Reed Hastings, the same thing. You know, when you invest in an entrepreneur, you get the personality. And if that’s not appropriate or you don’t think it’s right, buy another stock.
Wapner: yeah, but, I mean, come on. The fundamentals matter, don’t they? I mean, whether Tesla is going to go private or not, that’s at the heart of this conversation.
Cuban: but fundamentals – it depends where you are in your life cycle, right, or growth cycle of the company. You know, if you look at the companies I just mentioned, but everybody complains about amazon. Fundamentals matter. Everybody complains about Netflix. Fundamentals mattered. Again, Steve Jobs got fired from apple. Fundamentals matter. And they brought in John Sculley, a traditional entrepreneur, who – or a traditional CEO – who was good at what he did, but he wasn’t the guy to drive apple to new heights. They had to bring Steve back. That’s just the nature of great companies. These guys, you know, they don’t cash out like me. They stay there because they’re committed and dedicated, and you’ve got to take the -- some of the – the uniqueness of each person as part of what you invest in.
Wapner: if you were a shareholder in Tesla, and I don’t believe you are. Correct me if I am wrong.
Cuban: no, I’m not.
Wapner: how should shareholders though feel about a tweet coming out saying “funding secured,” the stock gets halted -- now what if the deal doesn’t happen?
Cuban: I mean, look. I guess that’s the way we run the country, we run some companies now too. But what I would tell Elon, and I don’t know him at all, and I do have two Teslas, by the way. I would tell him short are your friends. You know, going back 20 years when we ran broadcast.Com, you know, a lot of -- we were like a lot of internet companies, heavily shorted. And you know, the beautiful of shorts is if you have a good quarter, if you do your job, then they have to buy back the stock at some point. And so, I would sit down with him and say, “look, rather than getting all upset about shorts, the more people that short your stock, the better position you have, the more, you know -- the more buyers you have in waiting.” and so I think that’s kind of the attitude someone has to get to him. But again, this is a guy who is sleeping in the factory. This is a guy who is pushing, pushing, pushing. And if you go through the list of all the companies I just mentioned, all the fangs, you know, maybe with the exception of google -- I mean, even Facebook. When facebook went public, then they had the questions about mobile. Then people questioned whether or not Zuckerberg can run it. Now Facebook going through other issues. Again people are questioning Zuckerberg. Great entrepreneurs who are so committed to their companies that they are never going to leave. They want to take it as far as they can take it. They are going to be unique. And there are going to be issues in how they address the public and how they address shareholders. And that’s the beauty of why those companies are so amazing and so big. And so I would tell shareholders, you know, be grateful that you have somebody that committed to the company and recognize that, you know, being unique is what has helped make Elon – or to help make Tesla so successful.
Wapner: you think he has taken the shorts too seriously? Or become consumed with what short sellers have been saying?
Cuban: yeah, it’s hard not to, right? When it’s your baby, a lot of times it’s hard not to take all that personally. It’s hard not to feel it inside of you. Particularly -- you know, to be a great entrepreneur, you have to be so competitive. And all the people that I mentioned, all had their persnickety issues, but they were all incredibly competitive, including Elon. And when you are that competitive and people are nailing and talking bad about your family like that, you -- it’s hard not to respond. And he has to learn not to respond. But, look, it happens to me talking about the mavericks. It happens to a lot of different people. When you’re criticized and it’s hard not to return fire sometimes.
Wapner: let me ask you this: I’m intrigued in and of itself by the fact that you don’t own Tesla. I mean, you have owned high valuation stocks in the past. Why not this one?
Cuban: I just don’t know the industry well enough. I mean, you know, I know streaming, so I have owned Netflix since 50. I know amazon and what they’ve done, and I’ve owned it off and on for a long time when it was single digits all the way up until I sold it I think at the 900s. And then when it was back at the 700s I went all in and just bought, you know, more than I probably should have at the time. And now I’m happy about it. So, you know, those are industries that I fully understand and those are – you know, Netflix and amazon are my two biggest holdings.
Wapner: you still think it’s a fang driven market?
Cuban: yes. If you look at where growth is coming from and where uncertainty is being driven, particularly with tariffs, the companies that will benefit – that will be impacted the least by tariffs are fangs. And the companies that will benefit the most by tariffs on other types of companies and drive them and drive interest towards there company are amazon, netflix, google, facebook, et cetera.
Jim cramer: mark, jim. It’s always great when you call in.
Cuban: thank you.
Cramer: you know, I’m just such a fan. But does it matter than David Wells, whom we both know is just a fantastic CFO, does it matter that he leaves Netflix?
Cuban: you know, I just read that. And I don’t know what the circumstances are behind it. And so it’s hard to say. You know, it’s funny, I was just thinking to myself, it’s never a good sign when a CFO leaves, but it’s not necessarily a bad sign. You know, you always wonder, and I don’t know what the circumstance behind – circumstances behind it and his departure at all, so I really can’t speculate. I haven’t sold my stock, if that means anything.
Wapner: well that’s a statement in and of itself. Do you think the market is in a good place overall? Where we are right now? 1% from an all-time – new all-time high on the s&p?
Cuban: you know, it’s a conversation I have. Literally I’m down to maybe four dividend owning stocks, two shorts, and amazon and Netflix. And I have got a whole lot of cash on the sidelines. There’s just -- there’s no way where you can just say I just trust everything that’s going on, and that concerns me. Put aside tariffs and put aside what the president is doing, he’s got his reasons, but when you just -- I just think we have borrowed from the future to kind of pump up the current market, and as much as Rick Santelli gets upset about quantitative easing and cheap money, I think borrowing from the future and the debt is as big a problem if not more so. And that really concerns me because at some point that’s gonna come due. And I don’t know when the market will start to recognize that and that’s my biggest concern.
Wapner: do tell, and two shorts – wanna review them?
Cuban: no, I’ll keep them to myself. But I will say this. There’s a site that I started funding 12 years ago, it’s called share sleuth, and he does all my research for public companies that present public information that most people ignore. And he just does a great job. And so – if you want to know where my short interests traditionally have been, just check out that site. Because we publish it all. Because you know I’m not best friends with the FCC so literally anything that I have shorted has been published.
Wapner: sure. You mentioned the stocks you own. You still own twitter?
Cuban: no, I don’t. I don’t. Not for any particular reason, other than I wanted to try to accumulate as much cash as possible.
Wapner: oh, so you are holding more cash than you normally would?
Cuban: oh, yeah, a lot more cash. Yeah. I’m ready, willing, and able if something happens.
Wapner: great. Do you think we’re going to get -- we’re having a conversation around the desk today at the beginning of our show saying, look, this is the great American stock market representing what is a very strong economy, especially in the face of all these other issues around the world. Turkey currencies, et cetera. So rather than think that we can hit record highs, 3,000 or 3,100 on the s&p, you think we’re going to take a step or two back?
Cuban: I’m not saying that at all. I’m not saying we can’t hit record highs. I’m just saying that I don’t have a complete level of confidence that we will. I just -- I’m concerned about the debt. I think that with the tax cuts, there’s that -- the algorithm if you will, you know, will the GDP grow – realistically grow fast enough to overcome the increases in the debt and particularly raises in the interest rates that expand the debt. So I’m not ready to say that that’s going to be a net positive to the economy. And if I get -- if I get a feeling that growth will continue at 4% plus, and we don’t have -- and the debt will then come down, then I’ll get back in the market. But I just -- you know, I’ve got the two stocks that I think are great companies, and I think there’s a whole lot of uncertainty that attaches itself to pretty much everything else in the market.
Wapner: how does Mark Cuban view apple hitting $1 trillion? Does that make you concerned, worried about where we are in the cycle? Do you think, “oh, my gosh, that marks a top if nothing else.” how do you view something like that?
Cuban: no -- because all -- every threshold always seems really, really high until it’s not anymore, you know? And particularly with inflation starting to you know, pop up more and more and more, I think, you know, big numbers will be big until now they’re small. I remember being a kid 1 $100,000 house. If only one day I can own $100,000 house. You know, if only one day this stock had a $100,000,000 market cap. If only one day this company had a billion dollar market cap. And then you bust through those barriers, and then they become the floor. So, you know, I try not to put a whole lot of pretense into, well, we’re hitting this number, so everything must be different.
Wapner: yeah. Appreciate the time, as always, mark. Thanks for calling in.
Cuban: it’s always fun, guys. Appreciate the time.
Wapner: yeah, likewise. Mark Cuban joining us there. That’s it for us today. Jim, thank you so much for being here. "Power lunch" starts now.