Wall Street is hardly the place for establishing solid moral values. Sordid stories and financial scandals have contributed a litany of headlines across the globe. That's not to say, however, that compromised corporate executives are immune from their ethical mishaps. Along with higher levels of financial oversight, there are significant pockets of societal resistance towards liberal or progressive ideologies. This could lead to unforeseen consequences should business and politics become intricately mixed.
Take Target Corp. (NYSE:TGT) as a prime example. Last month on April 19, Target became the first major retailer in the U.S. to take a firm stance on the transgender identity issue. Through an officially released statement, Target stated that their guests and team members can use whatever bathroom they believe aligns with their gender identity. In other words, gender is no longer a medically established fact, but rather, a personal preference.
In an extraordinary coincidence, April 19 was also the date in which TGT stock closed at its all-time highest price -- $83.98. The day after the announcement, TGT took a modest hit, dropping to $82.87, or a 1.3% decline. Further declines followed, which resulted in choppy trading. But the important point here is that TGT never looked the same. In fact, it never threatened the April 19 high. Over the next few weeks, TGT shareholders would lose 12% of equity valuation.
That's nothing to scoff at. Most analysts and financial experts would agree that 10% is the cutoff to determine whether a market has hit a correction. Not only has Target exceeded this threshold, its technical posture implies further bearishness. The trading that occurred in the first half of last week was indicative of an attempt to regain momentum, only to fail dramatically. Investors for whatever reason are running away from this stock.
Could it be that the vast army of conservative American families have simply had enough with progressive ideologies being shoved down their throat? Quite possibly, yes. When Target made their transgender policy announcement, the American Family Association quickly responded with a proposed boycott of the retailer. Within a day or two, the AFA collected over 700,000 digital signatures. Currently, that number stands at more than 1.2 million.
Subsequently, according to the New York Times, the amount of the U.S. population that identifies as transgender is between 0.3% to 0.5%. At most, transgender Americans number around 900,000 -- significantly less than the signatures collected by the AFA.
From a business perspective, Target screwed up big time. Their stores already had unisex restroom facilities, which are functionally transgender. Like their competitors, all Target had to do was simply shut up. Instead, they went full bore into a fringe issue, and earned the ire of conservative Americans -- which generate far more sales than transgender Americans can ever hope to do.
From a moral perspective, it was foolish for Target to take the mantle as the arbiter of cultural values. They failed to recognize that most people draw limits to so-called "cultural tolerance," especially when it becomes an affront to their own belief systems. So yes, moral values do matter on Wall Street, and ignoring them carries consequences.