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A Target investor has sued the retail chain, saying that it misled investors over risks related to its LGBT marketing and diversity, equity, and inclusion policies.
A lawsuit filed on Tuesday by America First Legal (AFL), co-counsel Boyden Gray PLLC, and Lawson Huck Gonzalez PLLC on behalf of investor Brian Craig in Florida says that Target cost shareholders lost billions of dollars because of its LGBT, ESG, and DEI policies.
The lawsuit accuses Target and its board of directors of betraying “both Target’s core customer base of working families and its investors by making false and misleading statements concerning Target’s Environmental, Social and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) mandates that led to its disastrous 2023 children-and-family themed LGBT-Pride campaign.”
Craig owns over 200 Target shares and says that the corporation’s board of directors and management misled investors about risk management over social and political messaging. The lawsuit says that Target did not consider potential criticism from more conservative customers when rolling out ESG and DEI mandates.
Target market value has declined $14 billion in value after backlash mounted to its June “Pride” month displays. During the controversy, Target was criticized for offering for sale “tuck-friendly” and “extra crotch coverage” female swimsuits.
In addition to the female swimwear designed to accommodate male genitalia, the Target “Pride” collection included small shirts with phrases like “Just Be You And Feel The Love,” Pride-themed onesies, as well as rainbow-colored leggings, tutu skirts, and jumpers.
Target removed some products and moved “Pride displays” to less prominent positions in some stores after scrambling following some conservative commentators urging a boycott of the popular retail store.
The lawsuit says the displays “embroiled Target in the culture war and caused Target to experience the biggest stock decline in the company’s history, costing investors billions.”
AFL Vice President Gene Hamilton said that Target’s board and management did not follow federal law making publicly-traded companies issue certain statements to investors on risk management.
“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,’” Hamilton said.
Back in June, Tesla CEO and X owner Elon Musk predicted that Target would face a lawsuit over the dramatic loss of value.
“Won’t be long before there are class-action lawsuits by shareholders against the company and board of directors for destruction of shareholder value,” Musk posted on X.