Mark Cuban Sells Facebook Stake; ‘It was Gambling Money’

Mark Cuban’s foray into Facebook didn’t last long.

The billionaire investor and Dallas Mavs owner sold his stake in the social network, less than a month after initially disclosing he had built a position in the company following its bungled initial public offering.

“I took my hit, my thesis was wrong,” Cuban said in a CNBC interview. “I thought we’d get a quick bounce just with some excitement about the stock. I was wrong, and when you’re wrong you don’t wait, you just get out. I took a beating and left.”

Late last month, Cuban disclosed on his blog that he had snatched up 150,000 shares of Facebook in three separate purchases. He said he bought 50,000 shares at $33, another 50,000 at $31.97 and 50,000 at $32.50. All three investments are currently underwater. Facebook today is up 4.2% at $31.26, but still down about 18% from its $38 IPO price.

At the time, Cuban described the move as “a trade, not an investment” and compared it to trading baseball cards.

“It was gambling money, to be honest with you,” he said on Monday. “Any time you try to time the market, you get what you deserve. Sometimes you’re right. Sometimes you’re wrong. This time I was wrong.”

Facebook’s trading debut last month was marred by technical glitches on the Nasdaq Stock Market, which left many investors confused over whether their orders to buy and sell shares had been fulfilled. The stock’s steep decline over its first month of trading left it as the worst-performing IPO of $1 billion or more for a U.S.-based company, according to Dealogic.

Cuban says much of the decline is due to basic supply and demand issues. Days before pricing the IPO, Facebook boosted the size of the deal to 421 million shares.

By comparison, LinkedIn issued only 8.4 million shares when it debuted last year. The stock more than doubled durings its first day of trading. ”If Facebook did the same, the stock would be at about $200 right now,” Cuban says.

Cuban also had strong words about the role of high frequency trading in today’s market.

“High-frequency trading has zero place in the market,” he said. “They should get rid of it altogether because it’s an unquantifiable risk that can impact the market in ways that we can’t even define.”