Posted 120 days ago
Corporate boards long tasked with fiduciary responsibilities to their shareholders are scrutinizing how Target allowed itself to become embroiled in social scandal big enough to cause a nearly $15 billion loss in market cap, "Shark Tank" star investor Kevin O'Leary told Fox News on Monday.
Since the backlash over its Pride merchandising controversy, Target's market value has fallen over $13 billion to $60.24 billion as of Monday's closing price. O'Leary, head of O'Leary Ventures, said the future is likely to bring a complete change in how corporate America approaches certain concerns like the processes that led to Target's "unprecedented" cliff-dive.
"On one hand, companies want to show their support of diversity in all the mandates that society is discussing openly," he said on "Jesse Watters Primetime." 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."
"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," O'Leary stressed.
The Minneapolis-based big-box retailer waded into controversial waters recently as its "tuck-friendly" swimwear geared toward the transgender community led to nationwide outrage.
That fallout was compounded by a Fox News Digital investigation that found its nonprofit foundation – directed by its senior corporate treasurers – funded an entity seeking to cede United States territory including Mount Rushmore, over claims it is a symbol of White supremacy, and sought to demilitarize the armed forces due to concerns of its "violen[ce]."
O'Leary suggested much of the furor was intensified by how fast the news of Target's behavior spread on social media – adding that many corporate boards don't always take into account the power of viral word-of-mouth.... (Read more)