Mark Cuban Says Coronavirus Will Improve Capitalism

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Capitalism will become more “compassionate” in the wake of the coronavirus pandemic, billionaire entrepreneur Mark Cuban said on Wednesday.

“I think capitalism is going to get a lot smarter and a lot more compassionate because of what we’re going through,” said Cuban on CNBC’s “Closing Bell”.

Cuban, owner of the NBA Dallas Mavericks, said he thought leaders would now recognize that they should put employees first. The consequences of not doing so will be greater now than they were in the aftermath of the financial crisis, when social media was still in its infancy, said Cuban.

“It’s not just the shareholders,” said Cuban. “In fact, you have to put employees before shareholders. “

Shareholders will ultimately reward companies that do so by giving their shares a higher multiple, Cuban argued.

Cuban said investors could say, “I will give Company A, B or C a higher P / E ratio when I buy the stock to reflect the fact that they understand the long term and that is not not just for this quarter or this year. “

The financial crisis of more than a decade ago contributed to a different social and political landscape, helping to give birth to populist movements in the United States and abroad. But Cuban said he thought the response of US companies to the economic crisis of the COVID-19 epidemic would be different.

“Everyone felt the risk of what was going on in politics and the threats, seeing the same surveys on Generation Z and the millennials who love socialism as much as they love capitalism,” said Cuban. “And I think any smart CEO recognizes that it was a threat. “

Cuban has been outspoken in recent weeks as the coronavirus pandemic intensified.

Cuba has warned businesses against dismissing workers too quickly and pressured Washington lawmakers to support workers hit by the economic shock.

He also said that any company that receives government aid to deal with the pandemic should be prevented from buying back shares.

Disclosure: CNBC holds exclusive rights to off-grid cable over Shark aquarium“, Of which Mark Cuban is co-host.

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