Mark Cuban made $5.7 billion from Yahoo's acquisition of Broadcast.com. He hedged his position by selling call options and buying puts, a move ranked among Wall Street's top ten trades. When the dot-com bubble burst, his position was fully protected.
When Yahoo bought you, right, they gave you $2.5 billion? No, they gave us $5.7 billion in stock, right? And then so I got 33% of it or whatever, right?
And then, um, when Yahoo went to about $2.5 billion, you sold everything?
When it went up, I did a hedge, right? They called it one of the top 10 trades all time on Wall Street. What did you do? So I got all the stock from Yahoo, and everybody else thought the internet bubble is going to keep on going forever, right? I'm like, there's no way. So I sold calls, bought puts, so I protected my stock. And so it went up in value some more and went up to where my hedge was and then cashed me out. I see, so— And then the whole market cratered and I was protected.
When you cashed out, Yahoo went up a little bit more and people said to you, oh, aren't you sorry? Well, exactly right. Why didn't you hold on to it? And you said, I've got 2.5 billion. I've got 2 billion in the bank. Well, how much do you need, right? That's exactly it. And you didn't get greedy. I mean, you could have kept saying, I'll stay in another day, I'll stay in another week. And if you had waited just a couple of weeks, Probably about 6 weeks, I would have been fucked.
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