- Mark Cuban says companies embracing the “woke” ideology, despite backlash against companies like Anheuser-Busch and Target Corp. are “good for business”.
- Cuban advised organizations to “wait and see the news cycle” as AB-InBev’s market cap value falls from $132.06 billion to $109.4 billion
- He said the “slump” was “meaningless” and unlikely because it was due to individual shareholders after the company partnered with Dylan Mulvaney on April 1
Shark tank star and NBA owner Mark Cuban has pointed out that “waking up is good for business” while Anheuser-Busch and Target Corporation grapple with backlash from LGBTQ+ marketing programs.
Cuban told the Pittsburgh Post-Gazette that the ongoing backlash will subside even though both companies have suffered massive billions of dollars in losses.
According to Ycharts, AB-InBev has seen its market cap drop by $22.6 billion since partnering with transgender TikTok star Dylan Mulvaney in April. Bud Light also lost its best-selling beer award to Modelo Especial in May.
Meanwhile, Target Corporation saw a $10 billion decline from $74.11 billion in the 10 days after it promoted Pride merchandise. It has since seen a slight increase, standing at $59.41 billion on June 13.
Due to their decisions, both companies have been subject to massive boycotts in recent months. Due to the criticism, Target withdrew its LGBTQ line – including “Tuck Friendly” clothing – from some stores.
While experts attribute the slump to the incantation of politics within these brands, Cuban stresses that being awake is a positive for other companies.
Shark Tank star Mark Cuban (pictured) has pointed out that “waking up is good for business” while Anheuser-Busch and Target Corporation grapple with backlash from LGBTQ+ marketing programs. Bud Light lost its award for best-selling beer to Modelo Especial in May.
“There’s a reason almost all of the largest market cap companies in the US can be considered ‘woke’. “It’s a good deal,” he told the Pittsburgh Post-Gazette.
“Most CEOs are experienced enough to know that they simply have to wait through the news cycle before moving on to the next.”
Since announcing the Mulvaney partnership in April, AB-InBev has reported a 23.9 percent decline in revenue from a year ago on a dollar basis.
Meanwhile, Target Corporation’s market cap lost billions of dollars as products including a “treat-friendly” women’s swimsuit hit the market.
Target shares fell 3.1 percent in five days on Friday and an estimated 18.5 percent over the past month.
Cuban has insisted the “slump” was “meaningless” and that individual shareholders were unlikely to have taken any action in the wake of the backlash.
“First, a drop in market cap is meaningless,” Cuban said.
“You have to realize that there aren’t many individual owners of stocks – almost all ownership is through funds, and most trading is quantitative.”
“So it’s not like the drop is because tens of thousands of individual owners have sold their shares.”
The Dallas Mavericks owner said that “people want to do business with companies that care about their customers,” a trait that “is an American trait that he thinks reflects who we are as a country.”
Since partnering with transgender TikTok star Dylan Mulvaney on April 1, AB-InBev has seen its market cap drop by $22.6 billion
Last week, analysts at global wealth management firm Bernstein said AB-InBev could see a permanent 15 percent drop in revenue due to the Mulvaney backlash.
They forecast that AB-InBev’s overall profit will fall by 6.7 percent in 2023.
The controversy erupted after Mulvaney, 26, shared a series of Bud Light promotional posts with people who are still boycotting the beer.
Musician Kid Rock responded by releasing a video of himself shooting at boxes of Bud Light, and country singers John Rich and Travis Tritt parted ways with the brand.
But media personalities like Joe Rogan and Howard Stern defended Bud Light’s decision.
Brendan Whitworth, Bud Light North America CEO, said on April 14, “We never intended to be part of a discussion that divides people. Our business is bringing people together over a pint.”
Whitworth also said he will remain focused on “building and protecting our remarkable history and heritage.”
Meanwhile, just weeks after the Mulvaney partnership, two marketing executives from Anheuser-Busch have taken a leave of absence. It is unclear if they have already returned to work.
After Anheuser-Busch attempted to distance itself from the Mulvaney ad, Bud Light also faced backlash from the opposite direction: pro-LGBTQ groups accused the company of failing the transgender influencer.
AB-InBev CEO Michel Doukeris has downplayed the impact of the backlash, saying that Bud Light’s US sales decline in the first three weeks of April accounted for just one percent of InBev’s global volume.
Target Corporation’s market cap lost billions of dollars as products like a “treat-friendly” women’s swimsuit hit the market. Meanwhile, Target Corporation saw a $10 billion drop from $74.11 billion in the 10 days after it promoted Pride merchandise
“We believe we have the experience, resources and partners to pull this off,” Doukeris said during a conference call with investors earlier this month.
AB-InBev’s other flagship beer, Budweiser, was also down 8.5 percent, while Natural Light and Stella Artois were down 1.5 percent to three percent.
Meanwhile, the company’s main competitors saw sales increase as beer drinkers switched brands.
Coors Light was up 26.3 percent while Miller Lite was up 23.1 percent. Yuengling recorded the largest increase at 36.3 percent.
Modelo Especial, owned by Anheuser-Busch, parent company AB-InBev, saw the smallest increase, up 9.5 percent.
Target could also suffer lasting damage as Walmart is now taking on customers who have chosen to boycott the brand.
Conservatives were already unhappy with Target’s Pride displays, which featured controversial items like women’s “tuck-friendly” swimsuits.
But the dire situation only got worse after they discontinued their Pride items – which angered the LGBTQ+ community.
Target’s Pride collection was associated with designer Erik Carnell von Abrippen, who expressed support for Satanism and incorporated occult imagery.
The company’s shares were already near a three-year low and had been downgraded several times over the Pride products controversy.
Citi analyst Paul Lejuez downgraded Target stock to neutral from buy, suggesting that rival Walmart could gain market share.
Erik Carnell (pictured) is a transgender designer and artist whose products US retailer Target has pulled from its Pride collection due to backlash from some customers
“We believe Walmart is likely to continue gaining market share, and Target’s high exposure to discretionary selling will not do them well in the current macroeconomic environment,” Lejuez said in a note to investors.
“Despite recent stock pressures, given this momentum, we cannot recommend that investors buy the stock and now believe the risk/reward tradeoff is more balanced, but the risk is more tilted to the downside in the near term,” Lejuez added in a statement , which is available to Fox Business .
Target also appears to be seeing a decrease in the number of people entering its stores.
In the last week of May, store traffic fell by 13.9 percent.
The decline was attributed to inflationary pressures and slower consumer spending over Memorial Day weekend.