'I Used To Make A F*** Ton Of Money Shorting Companies,' Says Mark Cuban, Revealing How He Started Sharesleuth, Sent People To Expose Firms

Mark Cuban, the billionaire entrepreneur and investor, recently opened up on the Flagrant podcast about his lesser-known venture into shorting fraudulent companies. Cuban shared how he used public information to spot businesses doing shady things and turned it into a way to make money.

"I used to make a f*** ton of money shorting companies. You have no idea," Cuban shared. He explained how he started Sharesleuth, which is still running today, though on a smaller scale. The goal of Sharesleuth was to show people which companies were being dishonest by only using publicly available information.

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Sending People to Verify Claims

Cuban explained the meticulous approach Sharesleuth took to uncover fraud. He hired “this guy” who would find companies putting out press releases about some new warehouses they opened. Then he'd send someone to check it out. In many cases, the claims didn't hold up. "No utilities, nobody there," Cuban revealed.

The results were staggering. When Sharesleuth shared what they found, the stock prices of these companies often dropped fast. "We would publish the article and it would say, ‘This is Mark Cuban's short position.' And we just killed it," he said.

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Why Shorting Worked So Well

Shorting, a strategy where investors bet against companies they believe are overvalued or fraudulent, proved to be an effective way for Cuban to capitalize on his findings. By exposing the truth behind these businesses, Cuban profited and shed light on corruption within the financial markets.

Cuban explained that there are all these bulls*** companies out there, noting how many had inflated market caps despite being built on shaky foundations. His strategy was to find the lies, share the truth and let the market figure it out.

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Fixing Broken Industries

While Cuban's short days made for fascinating stories, his focus has shifted to fixing broken systems. He's currently disrupting industries like health care through ventures such as CostPlusDrugs.com, which aims to provide affordable medication by eliminating middlemen and making prices transparent.

“What’s missing? No transparency, so I’m going to make all of our prices transparent. I’m going to publish our price list so everybody can see it and it’s been the easiest industry to disrupt I’ve ever been involved with,” he shared about his thought process when starting the company.

When asked what his superpower is, he explained, “My superpower is being able to look at something and say, ‘Here's what I know, here's what I think we can do, can we do it?' And then just going for it."

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