Decoding the Paradox of Rising Cable Stocks

[Commentary] The stock market is often an early indicator of major developments in finance, the economy and geopolitics. But sometimes that collective wisdom generates signals so difficult to decipher that they seem contradictory. That’s the situation right now for net neutrality and the future of the big cable and telecommunications companies.

The Federal Communications Commission is expected to issue a draft proposal on Feb. 5 for significantly tighter regulations for Internet carriers. But the issues involved are so complex and far-reaching that the market is having difficulty interpreting them. “I don’t think people in the stock market have caught up to events yet,” Richard Greenfield, a media analyst with BTIG, said in an interview last week. “Big things are happening. The prices don’t seem to reflect all of this yet.”