Target is currently having its Bud Light moment following its decision to prominently display massive "pride" sections in its stores full of controversial merchandise. While some items are geared toward children and others drew outrage for being from the designer behind "Satan respects pronouns" gear (though that stuff sold on her Etsy shop), one item, in particular, is reportedly what sparked the massive boycott: the "tuck friendly" swimsuit. The company's market value has fallen over $13 billion since the backlash began, and there's no end in sight. JPMorgan downgraded its outlook for Target's stock last week, citing "too many concerns rising."
The "stunning collapse" of Target's market cap over the backlash will "completely change ... the thinking of corporate America," according to Shark Tank's Kevin O'Leary.
"On one hand, companies want to show their support of diversity in all the mandates that society is discussing openly," he said on Fox News. "On the other hand, the job of a business—particularly from the perspective of an investor—and those that are retired, for example, that own the S&P 500 or own Target stock—are concerned that maybe they're losing their way in terms of what the prime objective is: your customers, your employees, and your shareholders."
He said the Target and Bud Light controversies are what happens when companies get "too far away from the primary mandate." The market, as the companies have now learned, will "really, really punish you."
But it's not just a lesson for Target and Bud Light.
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O'Leary said the blowback has "woken up all kinds of boards" and also taught that companies need to be cautious about what they're doing in the age of social media, where anything can go viral.
"When you can't control the message anymore through social media, which is clearly obvious, you better figure out what message you're putting out before it ever gets out there," he said, adding that "communications/media" committees should be created to guide boards on such issues.
"When you lose $11 billion of market cap, there are a lot of unhappy cowboys out there. They're called your investors."
