Target, a major retailer, is the subject of a new legal dispute in which Stephen Miller, a former senior Trump adviser, founded the conservative law firm America First Legal. The lawsuit alleges shareholder damages resulting from the fallout of Pride Month boycotts, accusing Target of misleading investors regarding diversity, equity, and inclusion policy risks.
The suit, filed in the U.S. District Court for the Middle District of Florida, is on behalf of Florida citizen Brian Craig, who purchased 216,450 shares of Target stock in April 2022 for $50,000. Craig claims that his assets dwindled to $34,839 a year later and further dropped to $28,896 by June 14, primarily due to the controversy surrounding Target.
The lawsuit points to a 20% decline in Target's stock price since mid-May, attributed to online mobs seizing Pride displays, triggering protests, bomb scares, customer threats, and a stock-market downturn. It asserts that the retailer's market capitalization suffered due to its "calculated decisions to promote sexualized material to children," referring to LGBTQ Pride family goods.
However, experts suggest that proving a direct link between the Pride Month backlash and Target's investor losses may be challenging. Neil Saunders, managing director for retail at GlobalData, highlights that Target's stock price was already on a downward trajectory before it became embroiled in the culture battle. Factors like flat sales and a slump in discretionary goods also played a role in investor concerns.
Saunders remarks, "It is extremely hard to quantify exactly what role the Pride Month backlash had on the stock price. There is no data to suggest it had a tangible impact on Target's sales, so it seems highly unlikely that it was the primary cause, or even a major cause, of the decline."
The controversy surrounding Target escalated when seven Republican attorneys general accused the company of violating their states' economic interests as shareholders due to its support for LGBTQ rights groups. This accusation prompted America First Legal's lawsuit.
Notably, Target has been celebrating Pride Month for years, but the intensity of far-right protests has surged recently, leading some activists to brand the company a "woke corporation."
As of now, Target has not provided an official response to the lawsuit.
This legal action marks America First Legal's first attempt to use investor losses as leverage against corporations on political issues. The organization, often seen as a conservative counterpart to the ACLU, has previously filed complaints against firms' racial equity initiatives and called for investigations into alleged discriminatory employment practices at companies like Starbucks, McDonald's, and BlackRock.
The lawsuit against Target reflects the broader landscape of culture wars impacting various corporations this year, as brands like Anheuser-Busch, Kohl's, Nike, North Face, PetSmart, and Walmart have faced backlash for carrying LGBTQ+ and trans-friendly products. The ramifications of these culture clashes extend beyond corporate boardrooms, influencing market dynamics and societal conversations on a grand scale.