By Scott AustinCall Mark Cuban what you like — Maverick of the NBA, a billion-dollar lottery winner, a reality TV shark, a prolific blogger — but he still views himself first and foremost as an entrepreneur.
Mark Cuban, in The Wall Street Journal’s offices talking shopThe billionaire first earned his riches from starting up MicroSolutions and selling it to CompuServe for $6 million in 1990, then more bountifully after co-founding Broadcast.com and convincing Yahoo to pay more than $5 billion for the company at the height of the dot-com bubble.
So as the valuations of Web companies like Facebook, Groupon, Twitter and Zynga skyrocket on the private markets, does Cuban think another bubble is brewing?
He’s calling this one a “technology VC bubble,” where new venture-capital money is paying off old money almost akin to, in his own words, “a Ponzi scheme” or “an old chain letter.”
In a video interview Friday with WSJ’s Alan Murray, Cuban said:
Rather than individuals benefitting or getting hurt, VCs are playing their own game of ‘bubble yes’ or ‘bubble no.’ What’s happening now is that if you’re an original investor in Twitter (as an example), that was great because the next VC who came in paid a higher valuation, gave some money to the company, but gave most of it to the first investors or to management….Then the next level that came in, they gave it to the previous. It’s more like a Ponzi scheme. It’s almost like an old chain letter.
Cuban’s not known for mincing words, but associating one of the most fraudulent investor schemes known to man with these venture-capital investments is a tad harsh considering Twitter, Facebook, Groupon and Zynga — the big four Web companies that have each raised hundreds of millions of venture capital, much of it going to early investors — have a real chance of staging IPOs and becoming successful publicly traded companies. (At least Cuban, who invests in start-ups himself, didn’t say venture capital is worse than a Ponzi scheme, as Fortune columnist Stanley Bing once did.)
But Cuban does make a valid point, that while these massive liquidity rounds are suspect, this potential bubble-trouble has yet to spill onto the public markets.
You can watch the 21-minute interview below or at this link (bubble talk starts at 14:19) in which Cuban uncharacteristically clamps up on the subject of basketball, but also discusses why investing diversification is for idiots, why patent trolls are the bane of tech companies and why he’s not running for president.
Regardless of the growth of alternative energy sources, crude oil is still the engine that powers the world. In country’s like the U.S. that consumes more than it produces, that means that those wishing to procure supplies must identify viable sellers of this vital commodity. In a world separated by language and culture, that is not always a simple process. For that reason, physical commodities brokers are often utilized to match buyers with sellers and expedite commodities transfers.
Sellers of crude oil can be found in oil producing countries including Russia, Nigeria, Saudi Arabia, Kuwait, Iran, Iraq, and Angola, to name just a few. To buy this commodity, however, you need to find a seller. The experienced broker in crude oil can assist a qualified buyer in negotiating and consummating transactions with three distinct types of sellers: state sellers, private sellers, and independent sellers.
State sellers are essentially government companies. This classification of sellers is relatively easily identified, and risks associated with transacting business with these companies are low. The downside for the prospective buyer is the price. Generally, state sellers garner market price for their crude oil. Additionally, state sellers demand higher levels of buyer verification both in terms of capital and historical ability to close large crude oil transactions. If buyers can meet these requirements, the best approach to state sellers is via registered crude oil agents or facilitators.
Only slightly less restrictive, private sellers represent an alternative source of supply. BP, Shell, Chevron, Exxon Mobil, and other major explorers, extractors, and processors of crude oil products are examples of private sellers. As in the case of state sellers, guaranteed supplies and low risk are offset for the buyer by higher prices and more restrictive scrutiny of prospective buyers. These companies can be contacted via headquarters or branch offices in many of the developed nations.
The third, least restrictive, and perhaps best source of crude oil for those purchasers just entering the crude oil market is the independent seller. Independent sellers secure their supplies from private sellers, state sellers, or some type of oil allocations. Ease of transaction with this classification of seller is dramatically enhanced and an extensive transaction history and large levels of capital reserves are usually unnecessary. Buyers usually only need to provide proof of funds required to complete the transaction. The downside risk to the purchaser from an independent seller is the vastly higher potential for fraud in these transactions. In these types of transactions, the seasoned crude oil broker can help the purchaser navigate the transaction successfully.
This is your new blog post. Click here and start typing, or drag in elements from the top bar.