Elon Musk Says Target Will Face Shareholder Lawsuits Amid Pro-LGBT Controversy

Elon Musk, founder and chief engineer of SpaceX, speaks at the 2020 Satellite Conference and Exhibition in Washington on March 9, 2020. Win McNamee/Getty Images

As Target’s stock price has taken a beating amid conservative backlash over the company’s decision to sell LGBT-themed items and clothing, Twitter CEO Elon Musk said Friday that it’s just a matter of time before Target faces lawsuits for “destruction of shareholder value.”

Musk made the remarks in response to a tweet by conservative activist Charlie Kirk, who posted about JPMorgan downgrading Target’s stock after suffering its longest losing streak in decades.

Over the past month or so, Target’s stock dropped by double digits amid conservative calls for a boycott against the chain in connection to its decision to sell LGBT-themed apparel, including onesies for children and books instructing kids about the use of transgender pronouns.

Several days ago, JPMorgan downgraded Target Corporation’s stock from overweight to neutral, with the Wall Street bank citing “too many concerns” with the retail giant.

“We believe this share loss could accelerate into back to school and linger into holiday given consumer pressures and recent company controversies,” wrote JPMorgan analyst Christopher Horvers, per MarketWatch. “This could turn [Target’s] traffic negative after an impressive run of 12 consecutive positive quarters.”

Musk responded to Kirk’s tweet about Target’s stock downgrade by predicting that the company would face shareholder lawsuits.

“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 wrote.

Kirk replied by saying that shareholders should organize to get politics out of the “hyperpolitical” corporations of today.

A Target spokesperson did not immediately respond to a request for comment.

A worker collects shopping carts in the parking lot of a Target store in Highlands Ranch, Colo., on June 9, 2021. David Zalubowski/AP Photo

‘Continuing Commitment’

While Target said a week ago that it had removed some items that sparked the greatest controversy, it did not go into detail about which ones. The company also reiterated its “continuing commitment to the LGBTQIA+ community and standing with them as we celebrate Pride Month and throughout the year.”

“Since introducing this year’s collection, we’ve experienced threats impacting our team members’ sense of safety and well-being while at work,” Target said in a statement. “Given these volatile circumstances, we are making adjustments to our plans, including removing items that have been at the center of the most significant confrontational behavior.”

Target is among major brands—including Bud Light—that are facing backlash for supporting LGBT causes.

Several other companies, including PetSmart, Chick-fil-A, and Walmart, are also now facing boycott calls due to their endorsement of the LGBT agenda.

Experts say a big factor encouraging brands to promote transgender ideologies is an attempt to score points on environmental, social, and governance (ESG) standards.

A bottle of Bud Light beer is seen at a grocery store in Glenview, Ill., on April 25, 2023. Nam Y. Huh/AP Photo

‘Just Good Business Decisions’?

Target CEO Brian Cornell was asked about the backlash against “woke” companies during Fortune’s “Leadership Next” podcast several weeks ago.

“I think those are just good business decisions, and it’s the right thing for society, and it’s the great thing for our brand,” Cornell said.

“The things we’ve done from a DE&I [diversity, equity, and inclusion] standpoint, it’s adding value,” Cornell said, referring to policies that a number of prominent conservatives have panned as leftist and “woke.”

“It’s helping us drive sales, it’s building greater engagement with both our teams and our guests, and those are just the right things for our business today,” Cornell continued.

“When we think about purpose at Target, it’s really about helping all the families, and that ‘all’ word is really important,” he said.

The Target chief added that the focus on “diversity and inclusion and equity has fueled much of our growth over the last nine years.”

Target, which is one of the biggest retailers in the United States, has long faced boycott calls.

In 2016, calls for a boycott were sparked when Target released a policy that allowed men who identify as women to use women’s bathrooms.

Boycotts in Focus

The boycotts against pro-LGBT companies have come into sharper focus in recent months.

Erin Elmore, a contributor at Turning Point USA, argued that calls to boycott Target are “not necessarily conservative.”

Instead, “it’s common sense. Most parents don’t support satanists or little boys wearing girls bathing suits,” she said in a tweet on May 28.

Some controversial items carried by Target include a onesie for infants that states “Bien Proud,” a children’s book with the title, “’Twas the Night Before Pride,” a book that tells children how to use transgender pronouns, and a handful of T-shirts with similar slogans, according to the firm’s website.

Target also drew backlash for “tuck-friendly” swimwear, but a spokesperson for the retailer said that the swimwear wasn’t made for children.

A number of prominent conservatives called for boycotts of Target, while accusing the Minneapolis-based retailer of grooming and exploiting children.

“I cannot state enough how important is for people to choose not to shop at Target. There has never been a company that has been more pro-transgenderism than Target,” conservative commentator Candace Owens wrote earlier in May.

The boycotts of Target, and other companies, have also triggered calls for protests from supporters.

“We have to remember that pride started off as a protest,” Rep. Robert Garcia (D-Calif.) told his party’s LGBT caucus recently, according to Semafor.

“It cannot just be a celebration anymore. We are being systematically attacked,” he said.

Garcia was the first openly gay mayor of Long Beach prior to winning his House seat in 2022.

Pro-LGBT group Human Rights Campaign (HRC) said in a May 25 press release that the pushback against brands like Target and Bud Light are “blatantly organized by extremist groups.”

The boycotts serve “as a wake up call for all businesses that support the LGBTQ+ community. We’ve seen this extremist playbook of attacks before. Their goal is clear: to prevent LGBTQ+ inclusion and representation, silence our allies, and make our community invisible.”

While conservative calls for boycotts of Target and other brands continue, some have expressed doubt about how sustainable such actions can be.

“Conservatives have typically been not very good at boycotts,” Sen. Ted Cruz (R-Texas) said during a recent episode of his podcast.

Cruz said there are easy alternatives for a product like Bud Light, while switching to a different retailer is harder.

“It’s difficult for nobody on planet Earth if you were going to order a Bud Light to say, ‘I’ll have a Coors Light.’ That’s a very simple substitution,” he said.

“Target? We’ll see how prolonged and easy a substitution it is. There’s Walmart. You know, there are alternatives,” he continued. “I will say Targets are located in a lot of areas and very convenient for a lot of shoppers.”

“So we’ll see if this becomes a persistent consequence or not,” Cruz added.