Target’s stock has taken a massive dive, with a market cap of about $14 billion lost by Tuesday. This is a drop that started in mid-May. We reported that Target had two downgrades – from JP Morgan & KeyBanc – and was on its worst losing streak in 23 years. JP Morgan said that “too many worries are rising” was the reason for their downgrade.
It’s amazing how much has changed in such a short time. Elon Musk, Kevin O’Leary of Shark Tank, and others are now warning that the next shoe could drop on the company.
O’Leary said on “Jesse Watters Primetime” that Target seemed to have lost its way when it comes to what they do and how this sent a warning to other companies of the dangers associated with going down the woke path.
On one hand, businesses want to show that they support diversity and all the issues being discussed in society. The job of a company is to show its support for diversity in all the mandates that society is discussing openly.
If you get too far or too close to the main mandate, you will be punished by the market. It’s awakened all sorts of boards.
The two spoke about Target’s non-profit funding of an organization that wants to close down Mount Rushmore, claiming it is a symbol of “white supremacy”. They also attacked the U.S. Military.
O’Leary stated that many companies don’t fully understand social media, and how a negative reaction can be spread by the public. He noted that Bud Light, after becoming the number one selling beer brand, was ruined in “32 hours,” after promoting Dylan Mulvaney’s “365 Days of Being a Girl.”
But he said, “There’re a lot of unhappy cowboys out there. They’re called your investors.”
Elon Musk went even further when he forecasted how shareholders would react.
BREAKING: JP Morgan just downgraded Target’s stock, after its longest losing streak in 23 years citing “too many concerns rising’.
Happy Pride Month Target!!
— Charlie Kirk (@charliekirk11) June 1, 2023
Musk said that it won’t take long for shareholders to file class-action suits against the board and company, claiming they have destroyed shareholder value.
The companies will understand the message if this happens. The companies may not fully understand the influence of social media, but they’ll be able to hear their shareholders screaming as their stocks plummet, and this could have an impact on their decisions.
This is not only a lesson for Target but also for other companies. The other companies will see what Target has done and the damage they have taken. They don’t want their companies to suffer a loss of billions, or to be criticized by their shareholders. It could be a good thing for the future of the companies to stop pushing political positions.