‘Shark Tank’ Star Says Retail Chain’s ‘Stunning Collapse’ and $15 Billion Loss Should Be a Warning to CEOs

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According to “Shark Tank” star investor Kevin O’Leary, corporate boards, responsible for safeguarding the interests of shareholders, are closely examining how Target allowed itself to become entangled in a significant social scandal that resulted in a staggering loss of nearly $15 billion in market capitalization. O’Leary shared this observation with Fox News on Monday.

Following the backlash surrounding its Pride merchandise controversy, Target has experienced a decline in market value of over $13 billion, settling at $60.24 billion as of the closing price on Monday. O’Leary, who heads O’Leary Ventures, anticipates a complete transformation in how corporate America addresses specific concerns such as the processes that led to Target’s “unprecedented” plunge.

“On one hand, companies want to show their support of diversity in all the mandates that society is discussing openly,” O’Leary 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,” the Shark Tank known as “Mr. Wonderful” stressed.

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Recently, the Minneapolis-based retail giant found itself embroiled in controversy when its introduction of “tuck-friendly” swimwear specifically designed for the transgender community sparked widespread outrage across the nation.

This controversy was further compounded by a Fox News Digital investigation, which revealed that Target’s nonprofit foundation, under the guidance of its senior corporate treasurers, provided funding to an organization advocating for the relinquishment of United States territory, including Mount Rushmore. The rationale behind this action was based on the claim that Mount Rushmore symbolizes White supremacy. Additionally, the foundation sought to promote the demilitarization of the armed forces due to concerns about their “violence.”

O’Leary highlighted that the magnitude of the backlash was amplified by the rapid dissemination of the news through social media. He emphasized that many corporate boards often underestimate the impact of viral word-of-mouth communication in these situations.

“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 ever gets out there,” he said.

“We almost need a new committee on boards. We have committees for risk… compensation — We’ve got compliance committees. We need a communications/media committee to advise the rest of the board who don’t even have Twitter accounts or don’t have Facebook or don’t use LinkedIn.”

According to O’Leary, numerous corporate boards fail to comprehend the “inherent risks” associated with their actions in today’s era of immediate social media communication.

He cited the example of Anheuser-Busch, emphasizing that the company had diligently built Bud Light into the leading beer brand in its category over several decades. However, within a mere “32 hours” of partnering with transgender socialite Dylan Mulvaney, the brand’s reputation was severely damaged.

O’Leary concluded that diversity officers will continue to play a role within corporate boards. However, he emphasized that the crucial aspect lies in how they utilize their authority and allocate resources.

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