A Telecom Tragedy, or a Fool’s Errand?

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It has come to my attention – and, I suspect, to the considerable vexation of over a million souls – that Verizon Communications (VZ 1.05%) suffered a most inconvenient lapse in its duties. A silence descended upon the airwaves, a digital darkness, if you will, leaving countless citizens bereft of their accustomed connection to the world. The company, in a gesture of magnanimity, proposes a paltry twenty dollars to soothe the ruffled feathers of the afflicted. A sum, I daresay, scarcely sufficient to purchase a decent apology.

One might, with a modicum of prudence, advise investors to steer clear of this troubled enterprise. Yet, I find myself, against my better judgment, drawn to this spectacle. Not by any expectation of triumph, mind you, but by a peculiar fascination with the follies of men and the enduring allure of a questionable bargain.

The Unchanging Comedy

Let us not delude ourselves into believing that this momentary inconvenience has fundamentally altered the character of Verizon. The long-term prospects remain, shall we say, stubbornly persistent. The promise of ever-increasing cash flow, and the distant dream of 6G networks, continue to dangle before the hopeful investor like a particularly gaudy trinket. And now, a most curious development: the acquisition of Frontier Communications (FYBR +0.13%), a transaction blessed by the regulatory powers. A merger, one suspects, less about innovation and more about expanding dominion over a shrinking pool of subscribers.

The company’s Chief Executive, one Dan Schulman, proclaims his intention to “aggressively transform” the enterprise. A bold declaration, to be sure. But I suspect this transformation will be more akin to rearranging the deck chairs on the Titanic than steering the vessel towards calmer waters. Still, for those who derive sustenance from dividends, Verizon continues to offer a yield exceeding seven percent. A generous offering, perhaps, designed to distract from the underlying uncertainties.

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A Fleeting Discomfort?

Granted, the costs associated with this recent debacle may exceed the aforementioned twenty dollars in credits. Some disgruntled customers may, indeed, seek refuge in the arms of rival carriers. But history, as is so often the case, offers a comforting precedent. Recall the unfortunate incident at AT&T (T 1.01%) in February of 2024. Thousands were similarly deprived of connection, yet the company’s share price, with a most theatrical flourish, rebounded by a staggering forty percent. A temporary setback, swiftly forgotten. I anticipate a similar, if not identical, performance from Verizon.

The share price, predictably, experienced a slight dip following the disruption. A momentary pause, offering a discerning investor a most advantageous entry point. Verizon’s forward price-to-earnings ratio now stands at a mere 8.1, a figure considerably lower than those of AT&T and T-Mobile (TMUS 2.20%). A discrepancy, I daresay, that cannot be sustained indefinitely.

Thus, I conclude that this outage, while undeniably inconvenient, may, in fact, present a rather appealing opportunity for the long-term investor. Provided, of course, that Verizon does not succumb to further episodes of digital silence. Should such misfortunes befall the company, I shall, with a sigh of resignation, reconsider my position. But for now, I am inclined to acquire additional shares, and to observe, with a mixture of amusement and skepticism, the unfolding of this most peculiar drama.

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2026-01-20 11:52