Target's loss of nearly $15 billion in market value since the start of a boycott over LGBT Pride merchandise has "woken" up other companies about the importance of staying away from controversial issues, says businessman Kevin O'Leary.
The Shark Tank star told Fox News that Target's market collapse will lead to a "complete change in the thinking of corporate America, particularly S&P 500 public companies." On May 17, before the controversy, Target's stock closed at $160.96 a share, giving it a market capitalization of $74.3 billion, according to CNBC and YCharts. Two weeks later, on May 31, Target closed at $130.93 with a market cap of $60.43 billion.
"The stunning collapse of Target's market cap is almost unprecedented," O'Leary said. "... How this happened is being scrutinized by lots of other boards right now. And it's a discussion that's going on every day with institutional investors. On one hand, companies want to show their support of diversity and all the mandates that society is discussing openly. On the other hand, the job of a business particularly from the perspective of an investor … are concerned that maybe they're losing their way in terms of what the prime objective is – your customers, your employees, and yeah, your shareholders."
"And so if you start to get too distant or too far away from the primary mandate, the market has proven itself to really, really punish you. And it's woken up all kinds of boards," he added.
The boycott and backlash, he said, shows the "power" of social media.
The controversy began in mid-May when social media users noted that some LGBT Pride items sold by Target were designed by British designer Eric Carnell and his company, Abprallen. Carnell openly calls himself a Satanist, although he says he views Satan as a metaphor. Another controversial item was a "tuck-friendly" women's swimsuit for biological males who identify as female but who have not had surgery.
Target pulled some items, including those made by Carnell, but stood by the rest of its Pride line of merchandise.
Since the backlash/boycott began, Target's social media posts have been filled with customer criticism. On May 22, the most popular comment under a Target Facebook post about pickup and delivery read, "I will no longer go to Target." On June 2, a Target Instagram post about a candy dispenser included this popular comment: "Get rid of the baby pride items please."
Target also donates to GLSEN, an LGBT group that has taken controversial stances on several issues, including recommending that schools allow biological boys who identify as female to be allowed to participate in girls' sports.
Photo courtesy: ©Getty Images/Brandon Bell/Staff
Michael Foust has covered the intersection of faith and news for 20 years. His stories have appeared in Baptist Press, Christianity Today, The Christian Post, the Leaf-Chronicle, the Toronto Star and the Knoxville News-Sentinel.