New CEO for PayPal, Goldman's Rate Cut Call, U.S. Steel Rejects Takeover Bid 8/14/23

SPEAKER_1 (0:00)

What's on the horizon for financial markets?

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David Faber (0:31)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (0:36)

Good Monday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla, Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Futures did lose some ground here as we set up for an important week. July quarter earnings, retail sales, Fed minutes, bond yields perked up a bit as B of A upgrades the US consumer today. Our roadmap begins with a rate picture. Goldman Sachs expects the Fed to begin easing in Q2 of next year.

David Faber (1:00)

Also ahead, we're going to talk about what is next for the tech sector. This is in the midst of what's been a rough August, at least so far. We're down 7% month to date.

And sure as US. Steel, yeah, letter X surging in the pre-market. Company rejects an unsolicited takeover offer from its rival Cleveland Cliffs.

Let's get to some other news though, as well as we start the show. PayPal has a new CEO. Yeah, Alex Chriss who currently runs the small business and self-employed group for Intuit is gonna take over from PayPal's longtime CEO, Dan Schulman on September the 27th. That's according to members of the board.

Jim Cramer (1:39)

A little earlier than expected.

David Faber (1:40)

Yes, who conducted the search for PayPal's new CEO. Now Schulman, who earlier this year announced his intent to step down as CEO of the company by the end of the year, will remain a PayPal director until next May. Chriss' hiring was the result I'm told of a selection process that began in February. It saw the board review nine candidates, some of whom were current CEOs from the FinTech and consumer services industries. They reduced that pool to four candidates and then they chose Mr. Chriss. Members of the board selection committee tell me Chriss impressed them with his expertise and leading a division that contributes roughly half of Intuit's revenue.

He did oversee the acquisition of MailChimp. That was a $12 billion deal. It's an all-in-one marketing platform. Owned now, of course, by Intuit, run by him. They believe his focus on small and medium-sized businesses at Intuit will allow him to position PayPal to fulfill its growth ambitions in what obviously is a crucial customer segment for that company. Shareholders in the company, well, as you can see from a five-year, if you take a look, they haven't had a lot to cheer about for some time. The members of the board search committee tell me they met with roughly 20 investors as they conducted the search for PayPal's new CEO. That did include Elliott Management as well. Jesse Cohn, of course, who runs activism there. Though I'm told that firm had absolutely no role in the actual search.

And guys, we all can see the mountain that PayPal climbed at one point. I think it had hit a $350 billion market value.

Schulman has been under pressure, Jim, for some time.

Jim Cramer (3:12)

Yes, he has.

David Faber (3:14)

And again, earlier this year, did announce his intent to step down. He's a young guy, Chris. He's, I think, 46, obviously not his current CEO, though does run about a 7,000 person division at Intuit, but will be taking over company with some almost 30,000 employees.

Jim Cramer (3:29)

Wow, I mean, look at this guy. I happen to like Intuit. They've come on the show, and the QuickBooks division is a remarkable division for small business. Look, this could be a coup. I mean, I think PayPal needs to have better relationship with merchants because that's where they've been losing out, including to Apple.

I think the PayPal has stumbled. We've been waiting.

Carl, when you announced that a CEO is a lame duck for a year, I don't think that's such a hot idea, right? Wow, you know what? Let's let it be.

David Faber (4:00)

Yeah, I'm told they began the search in February, so it wasn't long after Schulman said I'm out of here at the end of the year.

And obviously, in speaking to a number of members of the search committee, they seemed quite happy with their pick, as you'd expect that they would. Not at all concerned by the fact that he has not obviously been a CEO. In fact, in some ways, embracing the idea that this is a guy who has a lot of experience in terms of product-facing, will be aggressive, though certainly not going after some big deal, such as a Pinterest, but aggressive, perhaps, in bolt-on acquisitions, to really try to bring about more change, more quickly at PayPal.