Recently, The Bill and Melinda Gates Foundation Trust purchased roughly 1.7 million shares of Anheuser-Busch stock. Despite the obvious risks to Anheuser-Busch’s stock stemming from the relentless backlash against the Bud Light Dylan Mulvaney disaster, the Microsoft co-founder is betting $95 million on the company.
Since the controversy with Bud Light began in early April, the beer maker has faced a massive boycott that has consistently driven sales down in the double digits, Anheuser-Busch stock erased billions in market value, and anything associated with the “Bud” brand has a severely damaged reputation in the eyes of consumers.
Bill Gates’ massive investment into the beer giant has many puzzled about the billionaire’s long-term outlook for Anheuser-Busch. Former Anheuser-Busch executive Anson Frericks is calling the investment decision a “mistake”.
“Bill Gates is definitely making a mistake,” said the former executive. “Earlier this year, he already made a $900 million mistake when he invested into one of Anheuser-Busch’s largest rivals, Heineken. He did that earlier this year. And since that investment, Heineken’s down about 10%, whereas the broader markets are up 10%.”
Frericks continued explaining that Gates’ history with investments in the beer industry would suggest it is an area outside of his expertise. The former Anheuser-Busch executive suggested the billionaire stay within the tech space.
“So if I was looking for advice on investing to software companies, tech companies, I might go to Bill Gates. But if you’re looking at the beer industry, he doesn’t have a great track record of investing in winners at this point,” he stated.
Frericks also outlined having Bill Gates associated with Bud Light is not exactly a move in the right direction. While perhaps not as egregious as Dylan Mulvaney, Bill Gates is a far cry from being relatable to the average Bud Light drinker. Frericks suggests employing an “everyman type of person”, such as an NFL football player, as an investor in the company.
“For the company’s sake, they’d probably be better off [with] maybe somebody who is more of, kind of the everyman type of person, maybe like a Rob Gronkowski or somebody like that was investing into Anheuser-Busch, not necessarily somebody like Bill Gates. That doesn’t really resonate with sort of that common man that everyday Bud Light beer drinker,” he said.
Anson continues to advocate for the classic shareholder theory model of running a company that essentially states the number one priority of a company is to generate returns for the true owners of the company, the shareholders.
“There’s one camp that says that Anheuser-Busch, they have a fiduciary responsibility to their shareholders and to take a look at just providing great products and services for their shareholders. That’s the camp that I am in,” he said.
When a company strictly prioritizes what is profitable for its shareholders, there is no room for injecting a woke political agenda, especially for a company such as Bud Light, where the target consumer base completely rejects it. Other companies have faced shareholder backlash for the financial consequences of woke initiatives. Recently, Target was hit with a lawsuit from a disgruntled investor over the department store’s alleged abandonment of shareholder interest.
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