Prem Watsa, head of Canadian insurer Fairfax Financial Holdings Ltd., said investors in technology companies including Twitter Inc. may soon be crying as the stock prices are unsustainable.

“There’s nothing underlying the value of these companies,” Watsa said Wednesday at the company’s annual meeting in Toronto, referring to a chart that included price-to-earnings ratios for Twitter, Netflix Inc. and Facebook Inc. “The last time this happened was in the dot-com era. This will end in tears.”

Investors have been pulling out of technology stocks for much of the year in favor of companies with stable dividends and earnings. The technology-heavy Nasdaq 100 Index fell the most in two years on April 4 before reversing direction by rising yesterday and today.

In his annual letter to shareholders last month, Watsa warned of a technology industry bubble similar to 1999. He pointed to San Francisco-based Twitter, which rallied after its November initial public offering, as one of the firms whose market value was based on “extraordinary speculation,” given its revenue.

“If you thought that Twitter was grossly overvalued at $26 per share, it promptly doubled,” Watsa said in the letter. “This sort of speculation will end just like the previous tech boom in 1999 to 2000— very badly!”

Jim Prosser, a spokesman for Twitter, said the company had no comment.

BlackBerry Bet

Shares of the social-media firm slid 34 percent this year through Tuesday to $41.78 in New York. Fairfax gained 12 percent during that period, outpacing the 5.5 percent advance of the benchmark Standard & Poor’s/TSX Composite Index.

Watsa, 63, a native of Hyderabad, India, founded Fairfax in 1985. He shaped his contrarian investment style after value investor Warren Buffett, adding out-of-favor securities to his portfolio. The firm gained from the 2008 financial crisis when Watsa bet on declines in the creditworthiness of U.S. banks and insurers.

Fairfax is the largest shareholder of BlackBerry Ltd., the Waterloo, Ontario-based company it failed to take private last year and instead financed with partners including Qatar Holding LLC and Manulife Financial Corp. It will probably take the struggling smartphone maker as long as two years to turn around, Royal Bank of Canada said in a note yesterday.

Watsa said today he still considers BlackBerry a good value investment and that the firm’s performance will improve over time.

–With assistance from Sarah Frier in San Francisco.