Operating on the ragged edge of legality, right-wing news outlet One America News Network, or OAN, appears to have a very strange bedfellow, at least according to an alarming report from Reuters. In the piece, it describes how telecommunications giant AT&T (NYSE:T) funded the agency often responsible for spreading misinformation and conspiracy theories. Naturally, investors are worried about the potential fallout to T stock.
As political analysts have pointed out, two key narratives are at play here: one is the societal and political aspect of funding a fringe network. Second is the economic angle. For the former, it’s very difficult to have the warm and fuzzies for T stock. This isn’t just about a difference of opinion. Rather, OAN hawks irresponsible ideas.
Indeed, The Independent called out an OAN host for calling for the execution of “traitors” who “stole” the 2020 U.S. presidential election. Honestly, it’s hard to distinguish some of OAN’s talking points to that of QAnon, the infamous far-right conspiracy movement. Therefore, the fear that T stock could suffer from the association is a real one.
For its part, AT&T denied funding OAN nor has it ever had a financial interest in its success, per a Newsweek article. If this happens to be another example of an overzealous report jumping to conclusions, then investors may be penalizing T stock prematurely.
Despite AT&T’s denials, though, it’s difficult to deny that Reuters is one of the top journalistic sources available. Whatever story it releases will have gone through an army of editors before going live.
And the downwind implications are ugly. While AT&T plans to spin off its WarnerMedia arm, this division owns the left-leaning CNN. So, at one point, it appears, AT&T was both the fire chief and the arsonist.
T Stock Is Ugly, But the Scandal Might Not Stick
Before I go any further, I should point out my own financial interests in this story. I own T stock, having done so a few years back when it hit a pre-pandemic bottom. If only AT&T would have disclosed its financial interest in OAN (if the allegations are true), many of you are undoubtedly thinking.
Personally, this scandal is a massive win for QAnon and anybody on the political fringes. If you’ve ever watched conspiracy-related YouTube videos, the near-universal common theme among them is that the media is lying to you. Essentially, some nefarious agent manages all media, thereby controlling the left-right paradigm that we plebeians feast on.
Therefore, all it takes is for the “sheeple” to wake up and fight the real enemy, which is (insert scapegoat here). Usually, the charges are laughable until it happens. Again, if the allegations are true, AT&T has been caught funding both sides of a precontrived war.
Of course, this is a terrible loss for political civility because it affirms the beliefs that fringe elements of society have. But will it be the downfall of T stock? I’m not so sure.
Admittedly, I’m not the most well-versed when it comes to the laws regarding media disclosures. It would seem that AT&T would have to disclose its interest in OAN whenever CNN bashes the conspiratorial network. Therefore, some legal ramifications may be due for the telecom giant.
But a societal backlash? Listen, this idea that the same hand controls media on both the left and right has been permeating conspiracy channels for a long time. About the only thing that’s changed is that we see mainstream confirmation of it.
Also, consider just how much the far right dives into binary talking points, so long as the scapegoat is anybody but the majority evangelical (or evangelical-friendly) demographic.
There’s a Reason for the Duplicity
While few will support AT&T’s role in being an ideological double agent, I can understand why the company did it. The reality is that catering to the far right is easy money. All you need is a charismatic personality and an identifiable enemy that looks or acts differently than the target audience. And the greater the differences, the more likely you are to channel (and profit from) the heightened emotions.
So long as AT&T can avoid costly legal troubles and can somehow provide a loosely plausible explanation, the damage to T stock should be limited. For instance, aside from its latest scandal, Facebook (NASDAQ:FB) handled the Cambridge Analytica controversy quite well. Again, up to the latest rumblings, FB was trading at all-time highs.
That confirms that even the ugliest social and political scandals won’t permanently derail the bottom line. Ultimately, how you view T stock in the long run should not include the OAN bit. It’s a distraction, yes, but outside of a devastating legal blow, this situation will probably blow over.
On the date of publication, Josh Enomoto held a LONG position in T stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.