Verizon Appoints Ex-PayPal CEO Dan Schulman, Signaling Focus on Digital Growth for Investors

Changing a company’s leader is a lot like changing the captain of a ship in the middle of a long journey—it can make everyone on board wonder what’s coming next and how smooth the ride will be. That’s what’s happening at Verizon right now.

What Happened at Verizon?

Verizon just named Dan Schulman, the former CEO of PayPal, as its new CEO. He’s taking over from Hans Vestberg, who has led the company since 2018. Even though this is big news, Verizon’s stock dropped about 5% after the announcement.

Hans Vestberg isn’t leaving completely. He’ll stay on the board and help with the transition until 2026. One of his main jobs will be making sure Verizon’s $20 billion deal to buy Frontier Communications goes smoothly. This deal is supposed to help Verizon bring faster internet to about 1 million more homes across the U.S.

The board also picked Mark Bertolini as its new chairman. He said he’s excited for Schulman to lead Verizon into its next chapter.

Why Does This Matter for Investors?

When a big company like Verizon changes its CEO, it can mean new strategies, risks, and opportunities. Investors want to know if Schulman can help Verizon grow and compete better, especially since the company’s stock dropped after the news.

• Schulman’s Track Record: At PayPal, he grew revenue from $8 billion to $30 billion and added hundreds of millions of new customers. That kind of growth is impressive and could mean good things for Verizon.
• Big Acquisition: Buying Frontier could help Verizon become a bigger player in broadband internet, a sector that’s expected to grow. According to a Statista report, global broadband subscriptions have more than doubled in the last decade.
• Stock Drop: A 5% drop in the company’s stock shows that investors are nervous about this change, at least in the short term.

The Bull Case: Reasons to Be Positive

• Fresh Vision: Schulman has a history of making companies grow fast. Investors who like change might see this as a chance for Verizon to speed up its growth.
• Bigger Broadband Footprint: The Frontier deal could help Verizon reach more customers, especially in areas that need better internet.
• Stable Transition: With Vestberg staying to help, the handoff should be smoother, which can lower the risk of major problems during the transition.

The Bear Case: Reasons to Be Cautious

• Uncertainty: Any big leadership change brings questions. Will Schulman’s style work at a telecom giant like Verizon? PayPal and Verizon are very different businesses.
• Integration Risks: Buying and merging with Frontier is a huge job. If it’s not handled well, it could hurt Verizon’s profits and reputation.
• Stock Reaction: The immediate 5% drop shows that many investors are worried about what comes next.

What’s the Historical Context?

Leadership changes at big companies often shake up the market. For example, when Satya Nadella became CEO of Microsoft in 2014, the company’s stock was slow to react at first, but then soared as his new strategies took hold. But not every CEO change works out—when GE changed leaders in 2017, the company struggled for years afterward. So, history shows that leader changes can be a turning point—sometimes for better, sometimes for worse.

Investor Takeaway

• Watch for Schulman’s First Moves: Pay attention to any new strategies or changes he announces in the next few months.
• Monitor the Frontier Deal: See if Verizon can smoothly add Frontier’s network and customers, which could help long-term growth.
• Be Patient: Leadership changes take time to show results. Don’t expect instant progress, but look for solid steps forward.
• Consider Diversification: If you’re worried about Verizon’s uncertainty, remember to spread your investments across different sectors.
• Stay Informed: Keep an eye on earnings reports, customer growth, and any signs that Schulman’s strategies are working—or not.

For the full original report, see CNBC