Buffett calls Facebook story 'extraordinary'

The Oracle of Omaha also says the hype does not signal a tech bubble.

By MSN Money Partner May 4, 2012 10:21AM
Warren Buffett, the CEO of Berkshire Hathaway (BRK.A, BRK.B), won't invest in Facebook, but he does understand the excitement surrounding its coming initial public offering.

Despite the hype, he doesn't think we're in a bubble similar to the dot-com craze of the late 1990s early 2000s. Listen to what he has to say:

20Comments
May 4, 2012 10:51AM
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LOL  He won't invest in FB because he knows it's on the way out.   The IPO is for the private investors to unload before revenues fall any further.

May 4, 2012 1:02PM
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I think the most telling thing about the facebook IPO is that the majority of money they're planning to raise is going into the bank accounts of a few people and not into actually growing the company.  That combined with the many lawsuits on patent infringement and intellectual theft tells me the company isn't worth it.
May 4, 2012 2:16PM
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Warren Buffett knows next to nothing about tech, and he freely admits it.  His opinion of Facebook is useless.

By all indications, the P/E is very frothy, and the company will have to rapidly monetize its user base for the earnings to catch up.  Combine this with spurious, foolish acquisitions (Instagram for $1,000,000,000) and no use for IPO capital, and you have an offering that is simply a cash-out for early investors.

Stay far, far away.
May 4, 2012 1:41PM
May 4, 2012 2:35PM
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I won't buy it,,,, but....  What happens when it turns into myspace.  American attention span is not very long. 
May 4, 2012 1:12PM
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Warren Buffet is an Old Fool - but at least he's smart enough to stay out of Facebook!
May 4, 2012 3:27PM
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Something tells me, Facebook will end up a flop.  I use it, but could easily change if something better comes out.  Remember, I used my space too and don't anymore. 

And should they ever start charging membership fees, forget about it.  Don't need face book LOL! and you can bet an advertisement only revenue site will be built in its place for everyone to run to.  The programming is not that difficult and network to support it can be created fairly easily. 

Barrier to entry-- Easy entry.  (negative)
Profit-- its advertising business right now... I think as far as I've read in on it the other junk about Facebook credit or whatever is silly.  (neutral)
Costs-- small  (positive)

I personally wouldn't buy it.  I think its a fad.   If you do want to buy it, my opinion, you better get in on it early before it bellies over.

May 4, 2012 10:58AM
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Smile He is in the insurance business where all households have at least 2 or more policies it has steady stable incomes and profits. Buffet is just watching what he says. LOL!Nerd
May 4, 2012 3:37PM
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I think I might sell short...just for grins
May 4, 2012 3:58PM
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The housing bubble negatively impacted far more people than the dot-com bubble. And guess who didn't see the housing bust coming?

May 4, 2012 4:20PM
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So, who is buying this Musack version of Microsoft, right down to it's Bill Gates look-alike CEO with a goofy haircut?


I just hope it's not my pension fund.

May 4, 2012 1:47PM
May 4, 2012 8:26PM
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If FB doubles after the IPO as some sites have been speculating, there is no way I could resist shorting it.

 

The ad revenues fell from 4th QTR 2011 to 1st QTR 2012.

 

Compare that to Google.. I don't believe Google has EVER had a QTR with less revenue than the preceding QTR.

 

And as the cool kids move to smartphones and away from FB, once it becomes common knowledge that FB is just corporatiopns and your mom & her friends it will die faster than My Space did.

 

Add to that the fact that the CEO has total control and you got a recipe for disaster.  Your buying the Whamo IPO during the frisbee-hula hoop craze.

 

Good luck with that.

May 4, 2012 3:02PM
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hey user 903....an ole fool worth billions .U need a reality check pal.the reaps of success.
May 4, 2012 3:11PM
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the more comments I read the more amazed I'am Warren Buffet's a fool and F.B.going public means it;s going under-------WHAT--------.what ever you folks are smoken, don"l exhale around me!!!
May 4, 2012 12:33PM
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Won't invest in it, but doesn't think were in a tech bubble.

Eternal stock market optimist, built on insurance company (other peoples money).

Believes taxing  income more, but makes money on cap gains and dividends (taxed less).

We love to follow celebrities, but end up fleeced sheep.

A very smart guy, but what's good for WB isn't necessarily so for the rest of us.

May 4, 2012 4:36PM
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Buffett does not have to worry about Facebook stock thanks to his buddy Obama killing the Keystone pipeline in the north.  The oil will now be shipped on BNSF rail which is owned by guess who?  Berkshire Hathaway Inc aka Warren Buffett.  Guess all that money he gave to the Obama campaign paid off. 
May 4, 2012 5:33PM
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People like Buffett and even that JACKASS OBAMA need to pay up or SHUT UP!! I'm sick to death of these two MORONS saying "everybody needs to pay their fair share"! WAKE UP AMERICA, the top !% pay taxes for US ALL!! They pay ENOUGH ALREADY. TAX THE PEOPLE DRAWING WELFARE AND EVERONE THAT MAKES AT LEAST $200.00 A YEAR!!! BRING ON THE FLAT TAX RATE FOR EVERY SINGLE AMERICAN EMPLOYED OR NOT!! I'm sick to death of seeing people on WELFARE walking out of WALMART with CELL PHONES AND FLAT SCREEN TV'S!!  THANX A WHOLE BUNCH OBAMA!! YOU SIR ARE A BUTT HEAD!! NO DOUBT ABOUT IT!!
May 4, 2012 11:58AM
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I WOULD LOVE TO OWN A PEICE OF FACEBOOK ,, EVEN A SMALL PART ,, EITHER IT WILL BE SOLD OR BOUGHT ,,,,, I'M JUST A SINGLE MULTIPLE SCLEROSIS MAN WITH THE DREAM OF JUST LIVING ABOVE POVERTY ,,,,, ALL YOU BILLIONAIRS ,,,, WHAT YOU WASTE IN A DAY WOULD CHANGE MY WORLD FOR EVER ,,  THINK ABOUT HOW YOU CAN HELP ONE PERSON A DAY ,,

WARREN BUFFETT witch i am a big fan of ,,OR FACEBOOK ,, WOULD NEVER MISS HELPING ONE PERSON A DA Y

May 4, 2012 11:58AM
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I WOULD LOVE TO OWN A PEICE OF FACEBOOK ,, EVEN A SMALL PART ,, EITHER IT WILL BE SOLD OR BOUGHT ,,,,, I'M JUST A SINGLE MULTIPLE SCLEROSIS MAN WITH THE DREAM OF JUST LIVING ABOVE POVERTY ,,,,, ALL YOU BILLIONAIRS ,,,, WHAT YOU WASTE IN A DAY WOULD CHANGE MY WORLD FOR EVER ,,  THINK ABOUT HOW YOU CAN HELP ONE PERSON A DAY ,,

WARREN BUFFETT witch i am a big fan of ,,OR FACEBOOK ,, WOULD NEVER MISS HELPING ONE PERSON A DA Y

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