If You Ask Warren Buffett, Social Networks Aren’t Worth All Those Billions

Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., speaks during a news conference in Bangalore, India, on Tuesday, March 22, 2011. Buffett, whose Berkshire Hathaway Inc. has a bullish derivative bet on Japan's benchmark stock index, said the country's record earthquake created a buying opportunity for equity investors. Photographer: Namas Bhojani/Bloomberg via Getty Images Photo: Bloomberg/2011 Bloomberg

While traveling in India, Warren Buffett warned investors off the impending rash of tech companies about to go public. Buffet has had a busy trip so far, trying to both shoot his elephant gun at a potential Indian acquisition for Berkshire Hathaway while courting local billionaires to give to charity. As someone who has spent the past four decades building his company's fortune by investing in industrial, financial, and consumer-goods companies, rather than wishy-washy technology, Buffett said social networks' bonkers pre-IPO valuations seemed unsupported. Although he didn't name any specific companies, Facebook was recently valued at $65 billion on the secondary market, Twitter at $5 billion, and Groupon is rumored to try to go public with a bigger valuation than Google did.

“Most of them will be overpriced. It’s extremely difficult to value social- networking-site companies. Some will be huge winners, which will make up for the rest.”

Oh sure, the "Oracle from Omaha" says something and now you listen!

Buffett Says Social-Networking Sites Overpriced Ahead of IPOs [Bloomberg]