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Verizon stock rises despite privacy scandal

June 7, 2013: 11:45 AM ET
The government may hear Verizon customers now. But investors don't seem worried.

The government may hear Verizon customers now. But investors don't seem worried.

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.

Click chart for more on Verizon

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.

Related: Apple denies feeding info to U.S. government

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.

roadkingtrdr
$VZ uh oh....Verizongate in the works

momomiester
$VZ..attention P.R. director..You got to change the "Share everything" name of the promo.Since when is Uncle Sam on my friends and family?:)

kozmoblue
$VZ =can you hear me now ? $FED=oh hell yes we can !

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.

Miriko
We can revolt against the cell phone companies don't pay our bills turn off our devices they would lose billions $VZ $T $AAPL $GOOG

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.

RocketBaxter
Patriot Act and Jobs Act, how language changes thought! Anyway, govt reports only 2% from $AAPL, 98% $GOOG $YHOO $FB Keeping my iPhone!

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.

In jest, I nominated electric car maker Tesla (TSLA). My pick for Reader Comment of the Week took it one step further and chose another Elon Musk company.

Ahh yes. An oldie but goodie from 2006 ... the pioneer days of YouTube!

  • Government 'spying' on my Verizon phone? Who cares?

    The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.

    I called my mother yesterday from my cell phone at 1:07 p.m. ET. The conversation lasted for five minutes.

    Since I'm a Verizon (VZ) subscriber, I guess there's a good chance that the government already knows MORE

    - Jun 6, 2013 12:04 PM ET
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    It's been a long road.

    Back in 2005, a group of merchants sued Visa (V), MasterCard (MA) and other credit card processors for allegedly conspiring to fix so-called swipe fees at unfairly high levels. MORE

    - Nov 20, 2012 12:46 PM ET
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    Could MetroPCS finally be getting its knight in shining armor? Investors sure think so.

    Deutsche Telekom confirmed Tuesday that it was in talks with MetroPCS to merge the beleaguered wireless carrier with its T-Mobile USA unit.

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    In a classic case of be careful what you wish for, shares of AT&T (T) and Verizon (VZ) both tumbled more than 2% Friday morning even though pre-orders for Apple's (AAPL) eagerly anticipated iPhone 5 sold out in under an hour. Meanwhile, Apple hit another all-time high and continued its march toward $700.

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    Investors have plenty of questions about the future of RadioShack following a dismal earnings report, but the electronics retail is still claiming to have the answers.

    As it delivered a surprise $21 million loss for the second quarter, RadioShack (RSH) said it would also suspend its dividend program to help bolster its balance sheet. A balance sheet that's saddled with $679 million of debt, including an upcoming debt maturity of $375 MORE

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    Shares of Netflix (NFLX) got off to a smoking start this year after a nightmarish 2011. But like the rest of the market (and especially momentum stocks), Netflix has come crashing back to Earth. The stock is now actually down almost 10% in 2012. Do investors think that the video market is dead?

    Not necessarily.

    Take a look at Coinstar (CSTR). The owner of the bargain DVD rental kiosk service Redbox is MORE

    - Jun 15, 2012 12:18 PM ET
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#StupidStock Move of the Day! $YHOO up 4%. Had 3% pop yesterday. Did @marissamayer quit $GOOGL just to sell to Alibaba? Not sure about that.
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