‘Shark Tank’s’ Kevin O’Leary calls Target’s $15B woke collapse a warning to corporations

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Target’s loss of $15 billion in market cap after consumer backlash to the retail giant’s controversial Pride-themed clothing line will have long-standing ramifications, Shark Tank star Kevin O’Leary predicts.

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As the market value of the U.S. retailer continues to drop after it pushed “tuck-friendly” swimwear geared toward the transgender community in its stores, the Montreal-born entrepreneur thinks the collapse of the big-box favourite should serve as a warning to other companies wanting to wade into controversial societal issues.

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“The stunning collapse of Target’s market cap is almost unprecedented,” O’Leary said on Jesse Watters Primetime.

“On one hand, companies want to show their support of diversity in all the mandates that society is discussing openly,” the Shark Tank and Dragons’ Den star added. “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 yeah your shareholders.”

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Target’s stock price plummeted following its launch of a Pride-themed clothing line, including items aimed at children, last month.

“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,” the founder of O’Leary Ventures said. “This is actually displaying the power of something most boards never thought about: social media. Look at Budweiser Light. It took decades to create the American beer and exactly 32 hours to destroy it. 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 gets out there.”

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O’Leary suggested that companies might want to consider new committees on boards to examine potential social media backlash from its campaigns. “We need a communications media committee to advise the rest of the board — who don’t even have Twitter accounts — to understand the risk inherent in what they’re doing.”

“By getting involved in this fight, they can’t win,” O’Leary said, branding Target’s move a “huge mistake” during an earlier appearance on Fox News.

“When Bud happened, I can’t believe that boards didn’t wake up to that decimation market cap … Budweiser was the American beer. It took decades to build that brand and they blew it up in 30 hours,” O’Leary told guest host Rachel Campos-Duffy on Jesse Watters Primetime in a segment that aired late last month.

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Bud Light saw sales plummet after it partnered with Dylan Mulvaney in a social media campaign that saw the beer brand delivering personalized cans to the transgender activist.

Mulvaney, who documented her transition from male to female on TikTok thanks to her Day 365 of Girlhood video series, received several cases of Bud Light with the trans activist’s face printed on the side of the cans to celebrate her “womanhood.”

The beer retailer’s move was met with swift backlash with its sales volume, not including what was sold at restaurants and bars, suffering a 26.1% year-over-year loss, Beer Business Daily reported.

Following Bud Light’s debacle, Target prominently featured a Pride collection selling some items from controversial transgender “Satanist” designer Erik Carnell in its stores. The marketing move was met with swift backlash and the company announced it was making changes to its LGBTQ+ merchandise.

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“If you’re going to take a stance and say that you care about the LGBT community, you need to stand by that regardless,” Carnell, who social media observers noted had designed items using satanic and occult imagery, told Reuters.

Carnell also dismissed claims he is a Satanist, telling the Washington Post he’s an atheist.

“For starters, I don’t believe in Satan,” he said. “If I believed in Satan, I’d have to believe in the Bible — and I consider myself an atheist.”

O’Leary said Target’s misstep was proof why many companies stay out of controversial areas of public life.

“When you are selling consumer goods and services, you cannot be partisan in any way,” O’Leary said. “Let me give you an example. Do you ever hear a CEO that represents a company ever talking about abortion? Never. Because that is an issue that will never be resolved. It’s a personal issue, it’s a family issue, it’s a religious issue. It’s partisan forever. You don’t touch it. Same thing with politics, same thing with gender identity. Everybody has a personal opinion about it. When you actually get involved in a fight like that, you lose 50% of your constituency. Target wants to sell to everybody … They’ve made a huge mistake.”

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O’Leary thinks that diversity and inclusion initiatives are still going to remain part of most corporate interests, but thinks that companies will keep a close eye on social media reaction to divisive issues.

“I don’t think you’re going to find a lot of people saying, ‘Oh, let’s not have diversity officers.’ That boat sailed. But what they do with their budgets now really matter and the risks they’re putting the company into because of the power of uncontrolled social media is obviously measurable,” he said.

“When you lose $11 billion of market cap, there are a lot of unhappy cowboys out there. They’re called your investors.”

Tesla CEO Elon Musk echoed those sentiments with his own prediction that Target’s Pride merchandising decisions will result in shareholder lawsuits against the retailer.

Musk tweeted Friday, “Won’t be long before there are class-action lawsuits by shareholders against the company and board of directors for destruction of shareholder value.”

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Twitter: @markhdaniell

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