Target sued by shareholder after Pride backlash depreciated stock prices by billions

America First Legal has filed a shareholder lawsuit against Target in response to the retailer’s significant drop in stock price from its pushing of polarizing Pride merchandise.

The lawsuit filed last week on behalf of shareholder Brian Craig is against Target Corporation and its board of directors for “betraying Target’s customers and shareholders with misleading representations about its Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) mandates, and for causing Target shareholders to lose billions of dollars,” according to a press release.  

In May, Target unveiled its 2023 Pride collection, which even included clothing geared toward infants and toddlers. Many customers expressed outrage over the collection, and calls for boycotting the retail giant circulated through social media platforms and news outlets.  

Before May the company’s market value was over $74 billion; as of Monday, Target’s market value was $59.4 billion.

In 2022 and 2023 proxy statements, Target assured shareholders and investors “the Board was monitoring for social and political issues and risks arising from the company’s ESG and DEI mandates.”  

America First Legal claims Target misled its shareholders by falsely reassuring them their money would be put at minimal risk.

“These false and misleading statements caused Target’s shareholders to unknowingly support Target’s Board and management in their misuse of investor funds to serve its divisive political and social goals – and ultimately lose billions,” the lawsuit states.

Gene Hamilton, America First Legal vice president and general counsel, said Target cared more about the left’s agenda than its stockholders.

“Federal law requires publicly-traded corporations to provide certain information to shareholders in their proxy statements that allow those shareholders to make informed decisions,” Hamilton said according to the press release. “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 leftwing ‘stakeholders.’  

“In so doing, they caused our client to lose a substantial amount of money, and we will vindicate his rights in federal court.”  

According to America First Legal, this isn’t the first time Target has used shareholder money to push the left’s agenda without consideration for the corporation’s brand, customers, or investors.  

In 2016, Target released a “Pride Manifesto” allowing employees and shoppers to use bathroom and fitting rooms that aligned with their gender identity. The manifesto came after North Carolina signed a law prohibiting men from using women’s bathrooms.

After negative publicity and backlash from the store’s bathroom policy, especially from the South, CEO Brian Cornell admitted, “Target didn’t adequately assess the risk, and the ensuing backlash was self-inflicted,” according to The Wall Street Journal.

Shareholder Craig is asking for a declaration the defendants violated the Exchange Act, a declaration that Target’s 2023 director election was void, damages he sustained from losses in stocks and other relief.  

America First Legal is joined in the case by co-counsel Boyden Gray PLLC and Lawson Huck Gonzalez PLLC.