Blodget misses limelight, calls for Google (GOOG) $2,000

Henry Blodget, who was banned from the securities industry due to his dishonest analyst work, predicts in AlleyInsider that Google Inc. (NASDAQ: GOOG) will hit $2,000 -- his biggest ever boost boast.

Blodget's fame soared in December 1998 when he predicted that Amazon.com (NASDAQ: AMZN) would hit $400 when it traded at $243 -- a 65% boost. After his call, which proved accurate, Amazon soared to peak at $630 in April 1999. It now trades at $552 on a comparable basis (six times the currently quoted price since Amazon split 3:1 in January 1999 and 2:1 in August 1999). Blodget was later hired by Merrill Lynch (NYSE: MER) where e-mails which trashed the companies he was publicly boosting landed him a life ban from the securities industry.

What is Blodget's logic for Google's $750 billion market cap (at $2,000 a share, which is 242% above its current $585)? "Assuming a 25x free cash flow multiple (generous), it would take free cash flow of $30 billion. That is one heck of a lot of free cash flow, especially considering that Google's free cash flow next year will be about $4 billion."

Is this achievable? Who knows. But one thing's for sure, I am one sucker who took the bait to write about Blodget's call. So while the SEC has banned Blodget from providing investment advice, he remains as media savvy as ever.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.