Is Mark Cuban’s Tech Bubble Crash Prediction Off-Base?

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nasdaq monitorsMark Cuban, the owner of the Dallas Mavericks recently made a lot of headlines when he said that the current tech bubble represented by the NASDAQ 500 is worse than the tech bubble that crashed in the year 2000. Is he right? Well, technically, no. The tree that Mark Cuban is barking up is the phenomenal rise of crowdsourcing equity platforms. These online programs allow investors to invest in private tech companies. This is a small segment of the technology space. He is saying that the action on the crowdsourcing platforms is somehow affecting the frenzy in the NASDAQ 500, now that that index has exceeded the 5,000 point mark.

I do agree that investors should at least be somehow worried and skeptical and a bit more careful now that we’ve breached the 5,000 NASDAQ psychological point. Today’s market is quite different from the tech market of the year 2000. Mark Cuban should know this. After all, he sold, which wasn’t really making any money, to Yahoo! for more than $1 billion dollars. That’s how he made his money. For him to knock crowdsourcing programs for untested private companies is kind of a non sequitur. I don’t know why he issued his statement the way he did. These two are not really connected. The market for untested private companies on those crowdsourcing platforms is somewhat different from the market that is pushing up the NASDAQ 500. Do I think there will be a crash? Yes. That’s the only point Mark Cuban and I can agree on.

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