I am frequently amused by comments about Google's stock price such as the following I pulled from the comments of a Digg posting called Google Shares Seen Surpassing $500 Mark.
It is just a bubble. No stock should be at the $500 mark.
There are many who think this way. The truth is that share price does not matter in isolation. What matters is the combination of share price and shares issued. Multiplying the two results in market valuation. If Google had decided to issue 100 times the amount of shares they had issued at a price target of about $0.85 per share, would the naysayers be saying "Google will never top $5.00 per share?" No.
To be fair, some Digg members are also astute financially. Here's a wise comment from hammerattack:
Anyone who says Google's stock is overvalued, or that they're in a bubble, is utterly unqualified to even comment. The per share price of the stock is largely irrelevant, and when you look at the multiple then consider their revenue and profit, you can see that the company is quite healthy. And that's the bottom line for an investor right now is how healthy they are. For future investors, they look at how healthy a company is going to be. Google is making massive investments in R&D which have and will result in real technologies.
Then there are comments like:
GOOG's trading at 90x earnings. MSFT's at 23x. MSFT has almost 11B free cashflow. GOOG has around 830M.
This shows insight, but the person is talking about trailing 
earnings. It's safe to talk about Microsoft's earnings this way since they haven't increased much in the past few years (click graphic to view Microsoft's lame stock performance over the past few years). But this doesn't make sense for Google since earnings keep increasing higher than expectations. In fact, Google is priced at 50.0 times forward earnings, compared to 56.7 for Yahoo. The fact that Microsoft is priced at 18.4 times forward earnings indicates the market does not think Microsoft will be able to significantly increase earnings. Yes, Microsoft has a huge cash flow which they could use for acquisitions, paying dividends, or using internally. But in 2 years we may see Google's free cash flow at $5B or more while Microsoft's may drop to $5B. Digg user dcasez puts this very eloquently:
Microsoft... interesting stock. If you look at what they've done the last 5 years (stock price) you realize how good of an investment they have been since 2000. Basically nothing. I don't think free cash flow matters as much as Talent, and Google I'm afraid has talent lining up to join them. Just like Microsoft had talent lining up to join them in the early 90's.
Not to say that Microsoft stock will not go up (it very well might), but I wouldn't judge a stock based on its free cash. Its whats under the hood of the company (the people) that will ultimately make or break a company.
Finally, there are some comments like:
Who's buying this stock at +$400? That's the question. I'm pretty sure it's not mom & pop (either directly or via investment funds). So... that leaves investment banks who were left out in the cold during the IPO.
Let's see... Would this person be more likely to buy 1 share of Google at $400 or 10 shares of Yahoo at $40? You see, it really doesn't matter. In fact, as I pointed out above, Yahoo is actually selling at a premium compared to forward earnings multiples. And you'd be paying the same total commission fees at brokerages like Ameritrade.
Lots of confusion about Google's stock price, but some people do "get it".
