JetBlue Airways
JetBlue shareholders might have a number of questions regarding this incident. Will there be executive departures? Is the privacy statement weak? Will the company be investigated by the Federal Trade Commission (FTC) for unfair business practices and sued by customers? What will be the impact of all these questions on their high-flying stock?
When you are growing as fast as JetBlue, finding who failed and taking action could have serious business consequences. Any executive departures -- there have been none so far -- could leave a short-term vacuum in this leanly staffed company.
The privacy statement, as worded, is excellent. "Not shared" should have said it all. Even though JetBlue received no money for the data it released, management's lack of stewardship will certainly be questioned by the FTC, which has also reviewed Microsoft
In today's litigious society, someone will certainly take JetBlue to court. Besides distracting the executives, the press may decide to give this serious coverage, which could discourage customers, and Wall Street.
Last Friday, Whitney Tilson took a close look at the challenges JetBlue faces. With a price-to-earnings ratio almost equal to that of profitable Southwest Airlines
So far, the market reaction to this news has been muted. JetBlue is within one dollar of its 52-week high. For Foolish investors, though, the cumulative effect of a high stock price, tarnished leadership, FTC review, and more press coverage to come on this incident may finally be pushing the risk of ownership too high.
Motley Fool contributor W.D. Crotty does not own shares in JetBlue, though he is a frequent JetBlue traveler. He welcomes your feedback at [email protected].