[hollerith]

Yeah, the fact that $2.5 trillion of actual investor money chose Google (Alphabet) means very little: what really matters is the opinions of anonymous commenters on HN (especially opinions that start with "doesn't really feel like")

People are so careful when writing anonymous HN comments and so careless in choosing where to invest their own money and the money of funds of which they are the professional manager

[majormajor]

> the fact that $2.5 trillion of actual investor money chose Google

Of course, a lot of money invested in Google was invested at a much lower price; if everyone sold all at once you'd have a hard time finding 2.5T of new money to buy all those shares. We could argue about if "not selling" is the same as "choosing again at the new price" every day... but... Google's not the interesting case here anyway.

For a young company in a hot industry like OpenAI total market cap is even less relevant since so much of the company simply isn't liquid anyway and the numbers come from far fewer instances of purchases than for an established public one.

[hollerith]

Yes, OpenAI's not being publicly traded makes it harder to value it, but the comment to which I replied referenced 3 publicly-traded companies.

[Jensson]

That is a bet and not a metric of company size. Some people bet a lot on small companies, doesn't make them large.

[hollerith]

Investors look at how much money is already invested in a company in deciding whether to invest. I.e., investors pay close attention to market cap.

If Google's market cap were $25 trillion, practically nobody would buy Google stock (and practically everyone who already held the stock would immediately sell) because most investors do not believe that Google can ever pay enough dividends or buy back enough stock to justify such a high valuation.

A company's market cap is a collective estimate of how much money the company will to return to investors in the future. When the company is publicly-traded in an open informational regime such as the US, this collective estimate is usually quite "accurate" in the sense that it is very difficult for any single analyst or single team of analysts to improve on the estimate.

An investor can make a big bet on a small company, yes, but the market cap of a company is more than just an indication of how much money has been bet on the company: it also mean that every investor (big or small) who still holds the stock believes that the expected amount of money that company will return to shareholders exceeds the market cap: if there were a holder of Google stock that did not believe that, he would convert the shares into treasury bills or cash in the bank.