Investor Sues Target After Shares Plunge Post-boycott
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Target is being sued by a legal organization led by Stephen Miller, a former senior adviser in the Trump administration, who claims the retailer misrepresented the risk to shareholders prior to criticism from customers over its LGBTQ and Pride-themed items.
Asserting that Target, CEO Brian Cornell, and the board of directors betrayed their customers and shareholders with false statements about their environmental, social, and governance (ESG) and diversity, equity, and inclusion (DEI) mandates, and for causing shareholders to lose billions of dollars, American First Legal filed the lawsuit on behalf of shareholder Brian Craig on Tuesday in U.S. district court in Fort Myers, Florida.
Target’s launch of its LGBTQ-themed products sparked controversy in May, and boycott calls were made. Children’s one-piece swimsuits with clothing tags describing the garments as having a “light binding effect” on the breasts and “tuck-friendly construction for male genitalia” with “extra crotch coverage,” as well as other children’s clothes with occult iconography, were among the products. Target moved the displays to new locations within its shops after removing some of the merchandise.
According to the lawsuit, Craig holds 216.45 shares of Target stock that he paid $49,995.95 for on April 11, 2022. The stock’s worth fell to $34,839 by May 17 of this year. It fell to $28,896 by June 14.
According to Gene Hamilton, vice president and general counsel of American First Legal, “Federal law requires publicly traded corporations to provide certain information to shareholders in their proxy statements that allow those shareholders to make informed decisions.”
“As alleged in our complaint, Target failed to execute its duty to its shareholders by making statements that led them to believe that political and social risks were being assessed — when in reality, the only thing Target’s board and management cared about was how effectively they fulfilled the desires of various metrics advanced by left-wing ‘stakeholders.'”
“In so doing, they caused our client to lose a substantial amount of money,” Hamilton added in the release, “and we will vindicate his rights in federal court.”
According to a June 2 Fox Business report, the controversy reduced Target’s market worth by $15.7 billion. Target’s stock price on Wednesday evening was $130.60 a share. The price had reached a high of $181.02 per share on February 2, 2023.
