Divya Narendra, the CEO and co- founder of SumZero, expressed his opinion on investing in Facebook Inc (NASDAQ:FB) as a wise investment during an interview with CNBC.
The American businessman thinks that tech stocks have been quite irregular in 2014. He said that the market sees dispersion between some of the industry leaders and the second and third place players such as Google Inc (NASDAQ:GOOG) and Facebook Inc (NASDAQ:FB). Narendra said he would prefer to invest his capital in one of these two companies.
Mr. Narendra said about Facebook Inc (NASDAQ:FB), that an investor, while buying its stock, essentially buys a portfolio, preferring the dominant players in the market. Facebook, the largest social network in the world, has additionally acquired the largest photo sharing app – Instagram as well as the largest text messaging app in the world – Whatsapp. He further went on to say that Facebook has a strong financial standpoint and is doing really well with engagements. He sees Facebook Inc (NASDAQ:FB) ideal for long term investments as the stock is expected to continue to surge over the next five to ten years. As an investor, and seeing Facebook from a valuation standpoint, Narendra said: “I am a fan.”
The Baron’s article had put a question on the scope of online advertising, despite the increasing adoption of the business model by Facebook, Google and other websites. It is doubtful if companies including Facebook Inc (NASDAQ:FB), which now is bigger than The Walt Disney Company (NYSE:DIS) in terms of market capital, could grow and raise enough revenue.
The ConnectU co-founder, however, seems not to embark on Baron when it comes to tech stocks. Narendra pointed out that they also had announced Facebook Inc (NASDAQ:FB) to be worth $10 or $15 per share back in 2013. He said that looking at the bigger picture the stock looks promising given the increasing popularity of smartphones. The number of users of smartphones has surged to range in billions. However, citing examples like Instagram, Whatsapp and Twitter Inc (NYSE:TWTR), he said that there is still a lack between engagement and monetization.
The full video of Mr. Narendra talking about Facebook Inc (NASDAQ:FB) is available below: