Promise

<p><strong>On January 17th, the CEO of PayPal promised to “shock the world” with an announcement on January 25th. The company’s stock price then surged, with some betting on a major partnership or the launch of a groundbreaking AI product. However, after the unveiling of modest new features yesterday, PayPal’s stock $PYPL plummeted, confounding investor expectations.</strong></p>
<h2 id="h-a-shock-promise-unfulfilled">A “Shock” Promise Unfulfilled</h2>
<p>On January 17th, confident in its upcoming results, the CEO of PayPal had stated that he was about to “shock the world.” Following this announcement, PayPal’s stock $PYPL rose to nearly $95, which is 15% higher than its current rate.</p>
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<p>Yesterday, PayPal did indeed make announcements, but they were far from “shocking the world.” These are new <a href="https://www.cointribune.com/en/stock-market-boom-washingtons-massive-investment-in-ai/" target="_blank" rel="noopener noreferrer nofollow">AI</a> features to improve customer experience, and a cashback system to retain users. Positive but modest improvements, they fall very short of the expectations raised by the CEO.</p>
<p>As a result, PayPal’s stock $PYPL collapsed after these revelations, dropping by 5% on the stock market in just a few minutes. It now shows a 15% decline from its post-announcement peak. This dramatic turnaround demonstrates the disappointment of investors, who evidently expected more than a revamped interface and a standard loyalty program.</p>
<h2 id="h-risky-communication-by-paypal-influencing-the-stock-market">Risky Communication by PayPal Influencing the Stock Market</h2>
<p>This stock market downturn highlights the danger of overly emphatic communication that overinflates expectations. By touting a global shock, the PayPal CEO set the bar very high. Naturally, when only minor service updates are announced, the disappointment is commensurate with the hype initially generated.</p>
<p>This risky communication has hurt PayPal by shining a spotlight on its announcements. The contrast between the promises and reality has amplified the disillusionment of investors, hence the immediate punishment on <a href="https://twitter.com/KobeissiLetter/status/1750576147266486596?t=FssnYSA3ilA7M44gxSO99g&amp;s=19" target="_blank" rel="noopener noreferrer nofollow">the stock price</a> in the market.</p>
<p>In the future, PayPal would do well to refine its communication, avoiding over-inflating expectations. It is better to under-promise and over-deliver rather than the reverse. Otherwise, disappointments can be costly in the stock market, as this cold shower has demonstrated.</p>
<p>Far from the global shock promised, PayPal’s announcements resulted in a stock market earthquake in the opposite direction. This setback is a reminder of the risks of overly emphatic communication that fails to manage expectations. To regain the trust of the investors in the stock market, PayPal will now need to under-promise and over-deliver.</p>

Exchange $PYPL: PayPal stock falls after CEO ‘shocks’ investors

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