OMAHA – On Monday, Facebook started the road show of its highly anticipated initial public offering. However, the promotional campaign will not convince two men: the legendary investor Warren Buffett and Charlie Munger, Berkshire’s 88-year-old vice president.
Despite the publicity, Buffett and Munger are not interested in investing in Facebook, or on their own behalf for the portfolio of Berkshire Hathaway.
“Never buy in an IPO,” Buffett told CNN at the annual meeting of the conglomerate in Omaha.
“The idea that something which debuts in the stock market that is provided with important commissions, with all kinds of advertising, and the seller choosing when to sell, is the worst investment I can do in the world from thousands of options. It is mathematically impossible,” said Buffett.
Munger took a step further. “I do not spend on what I do not understand. And I do not understand Facebook,” he summarized.
In fact, not only does he not understand it, he dislikes the whole idea. “I do not want people to publish all these personal things in a permanent record. I think it’s counterproductive. Basically I don’t like it.”
At the same time, Buffett would not bet against Facebook as well as other leaders in the technology sector. “I would not take a short position with Facebook, nor would I with Google, or Apple. They are great companies, but in terms of what they’ll be worth in five or ten years from now, I just do not know.”