Mark Cuban Says The The Trading Game Has Changed: 'You Can Be A Smart Investor And Be A Small Investor'

Fresh off a Reddit AMA, billionaire investor and entrepreneur Mark Cuban was on CNBC to talk about the GameStop Corp. (NYSE: GME) short covering fiasco. Here is a quick summary of his appearance.

Smart Investors: On the topic of treating GameStop traders and buyers as responsible adults, Cuban said the investment community often celebrates when people pay a lot of money for a piece of art or trading cards.

"We don't assume these investors are dumb," Cuban said.

Meanwhile, GameStop's stock was valued north of 20 times sales and this isn't necessarily a stretch in valuation as other e-commerce companies are similarly valued, Cuban said.

Related Link: In Staying Mum, Cramer Says GameStop Is Losing The Opportunity To Issue Shares

Much has changed in the market in recent years as the concept of a company worth $1 trillion would have been unbelievable just a few years ago, he said.

Also, the new age of investors isn't reading SEC reports, they're watching videos online to gain new knowledge, according to Cuban. For the individual trader, what matters most is the narrative.

Regulatory Challenges: Cuban said Robinhood created a part of this and the trading platform took out "a bunch of natural buyers."

Robinhood should have been more open about "capital restrictions," he said. Securities regulators will have to explain to the public what happens when a brokerage firm like Robinhood gets "crushed by too much demand," Cuban said.