Kevin O’Leary disagreed with Mark Cuban, another “Shark Tank” investor, saying on Tuesday that he believes publicly traded companies that qualify should not hesitate to access cash. money through the new small business loan program.
“You have a fiduciary responsibility when the government designs a program to use it because you have no idea how long this pandemic is going to last, when or if there will be treatment or a vaccine,” O said. ‘Leary on CNBC’s “Scream Box.” “You just don’t know.”
O’Leary, known as “Mr. Wonderful” on “Shark Tank,” was responding to Cuban’s comments Monday. The billionaire entrepreneur and owner of the NBA’s Dallas Mavericks has slammed companies like Shake Shack for applying for loans through the Paycheck Protection Program, which is part of the month’s $ 2.2 trillion epidemic relief program latest.
The hamburger chain initially received a $ 10 million loan under the program. But a few days later, the company announced that it would repay the money after accessing other types of capital through the public markets. He also said the program rules were confusing.
Chris Steak House and Ruth’s Potbelly also revealed that they had accessed PPP loans, which are available to businesses with 500 or fewer employees. Hotel chains and large restaurants were able to obtain an exemption for locations with fewer than 500 workers.
O’Leary, chairman of the O’Shares ETFs, said it was “valid” for companies to make a “marketing decision” to return the money after being criticized.
But he said he believes the uncertainty surrounding the coronavirus pandemic – and the loss of income associated with it – is too great not to tap into all types of government support. “If I were a shareholder in Shake Shack, and I am not, I would have questioned this decision” to return the money. He added: “They will look pretty stupid if in a year from now we are still talking about this pandemic the same way.”
Shake Shack did not immediately respond to CNBC’s request for comment on O’Leary’s comments.
Randy Garutti, CEO of Shake Shack, told CNBC on Monday that the company had secured its “long-term stability.” By returning the PPP money, he said, “now is the time for us to help our friends in the industry to do the same.”
The Paycheck Protection Program was initially funded with $ 349 billion, but ran out of money last week. The Senate could potentially vote on Tuesday to add money to the program.
– Disclosure: CNBC owns the exclusive rights to the off-grid cable for “Shark aquarium“, of which Kevin O’Leary is co-host.