Earlier this year, Target came under fire for its lineup of LGBT-themed merchandise, which the department store even partnered with an outspoken Satanist to create. The ensuing backlash against the company led to a dilution in market capitalization.
The American Tribune recently reported on a lawsuit filed by the conservative legal firm American First Legal on behalf of a Florida shareholder. The lawsuit alleges that Target misled investors on the risks associated with the pride campaign and other diversity, equity, and inclusion-related efforts.
According to a preliminary statement from the lawsuit, “Target Corporation……and its Board of Directors betrayed both Target’s core customer base of working families and its investors by making false and misleading statements concerning Target’s Environmental, Social and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) mandates that led to its disastrous 2023 children-and-family themed LGBTPride campaign.”
The New York Post reported on the substantial losses Brian Craig, the Florida investor the lawsuit represents, endured following the backlash from Target’s woke initiatives. Reportedly, the value of Craig’s shares fell precipitously to $34,839 and then again to $28,896 over the past few months.
Target found its share price continuously falling amid backlash for items in stores such as a book titled “Twas the Night Before Pride” and a variety of LGBT clothing, including a t-shirt that said “live laugh lesbian.” The store also caught heat for a female swimsuit that was “tuck friendly,” featuring extra room in the crotch.
Disgruntled investors, such as Craig, believe Target prioritized a social agenda above the true interests of the shareholders, attaining strong profit margins and producing returns. “These false and misleading statements caused Target’s shareholders to unknowingly support Target’s Board and management in their misuse of investor funds to serve its divisive political and social goals—and ultimately lose billions,” the lawsuit claimed.
Vice President of America First Legal Gene Hamilton slammed leadership at Target for allegedly disregarding securities law requiring companies to inform investors of risk management. “As alleged in our complaint, Target failed to execute its duty to its shareholders by making statements that led them to believe that political and social risks were being assessed — when in reality, the only thing Target’s Board and Management cared about was how effectively they fulfilled the desires of various metrics advanced by leftwing ‘stakeholders,’” Hamilton stated.
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A press release from American First Legal stated, “Federal law requires publicly-traded corporations to provide certain information to shareholders in their proxy statements that allow those shareholders to make informed decisions. As alleged in our complaint, Target failed to execute its duty to its shareholders.”
Amazingly, these woke corporations continue to take such bold stances in the culture war after so many prominent examples of consumers revolting, enacting disastrous financial consequences on these companies.
Bud Light should have been a warning for companies to return to the classic shareholder value theory of pursuing what is profitable for the true owners of the company, the investors. Woke virtue signaling may work for small, niche companies that base their entire brand around politics, but obviously not for a giant consumer-facing corporation that casts a wide net.