> I assumed that a deal with Rackspace meant a purchase of Rackspace products. I agree that you can buy a stock before trying to buy out the company--but you ca

> I assumed that a deal with Rackspace meant a purchase of Rackspace products. I agree that you can buy a stock before trying to buy out the company--but you can do that as an individual, too. It doesn't matter what kind of transaction Google and Rackspace are doing - it's illegal for Google employees to trade on this information and legal for Google to do so. In other words, Google employees can't trade on news of a Google deal to buy Rackspace the company or Rackspace equipment/services. Google the company is free to trade in both circumstances. > But in this case, the company trading on credit card data is clearly analogous to a Google employee, not to Google. They have material information about the prospects of another company, and they use that information to trade. Not at all. Insider trading is defined as improper use of corporate information by employees. Companies are free to act on their information. It doesn't make sense to define "insider trading" as use of "improper information", let alone "non public information". Remember - a huge fraction of trades are based on non-public information. For example, I may think that the iPad is a disaster. That's not public information, yet it doesn't make sense to restrict my ability to trade on it.