Verizon stock rises despite privacy scandalJune 7, 2013: 11:45 AM ET
There is clearly a lot of anger about the growing U.S. government snooping scandal. But investors aren't expressing any of it.
Despite a report that showed the NSA got a court order to receive phone records from telecom Verizon (VZ), shares rose nearly 3.5% Thursday. That made it the Dow's best performer. The stock was up again Friday.
Overnight, the story mushroomed into something much bigger, as reports of a government program called PRISM emerged. As part of that program, the NSA is reportedly mining for data from tech giants Google (GOOG), Yahoo (YHOO), Microsoft (MSFT), Apple (AAPL), Facebook (FB) and AOL (AOL). It was not clear if any of these companies willingly participated.
Apple was the only stock in that group trading lower Friday, and that probably had more to do about concerns related to Apple's sales and profits. It looks like investors were more interested in the favorable jobs report than PRISM.
Still, traders on StockTwits were wondering if there eventually could be negative financial repercussions for Verizon or other tech firms because of the privacy concerns.
There are clear problems here with what the government is doing. But as I wrote yesterday, I am still not that concerned about this particular invasion of privacy. I realize I may be in the minority here. Still, what's the alternative? Not using phones anymore? Well, one trader did in fact call for just that.
I guess we could do that. (Note. I am not suggesting that anyone become a tech deadbeat.) But given how attached we all are to our gadgets, I seriously doubt anyone is going to stop updating their Facebook status on their phones, tablets or laptops. We could all go back to sending letters in the mail! Oh wait. The government can probably read that too.
Anyway, one trader noted that reports seemed to suggest that the overwhelming majority of information the government is looking for comes from just three companies.
First a correction. The Washington Post reported that it was 98% from Google, Yahoo and Microsoft. Not Facebook. If true, I guess that makes sense since those three dominate search. And you'd have to think that if the government really is snooping on the Web, search queries are far more interesting to surveillance groups than say, the apps, songs and movies you download from iTunes.
Finally, time for Reader Comment of the Week. Let's end with some levity. Earlier this week, SodaStream (SODA) was surging on reports that Pepsi (PEP) or Coca-Cola (KO) may want to buy it. Pepsi flatly (pun intended) denied the takeover talk. But that didn't stop me and others on Twitter from suggesting alternative suitors for SODA.
Ahh yes. An oldie but goodie from 2006 ... the pioneer days of YouTube!