Some Target shareholders are expressing their displeasure with the retailer's controversial political donation.
As I reported earlier, Target got some good news Thursday when MSNBC refused to run a MoveOn.org TV ad critical of the retail chain's $150,000 political donation to a conservative group backing an anti-gay rights candidate for Minnesota governor.
But the Los Angeles Times reported, also on Thursday, that Target is feeling blowback from some of its institutional investors.
An LAT excerpt:
After weeks of public protest over its financial support of a company that backed a GOPgubernatorial candidate opposed to gay rights, Target Corp.now faces a new form of pressure: demands from institutional shareholders that it revamp its donation process to avoid the chance of additional backfires...
... "Imprudent donations can potentially have a major negative impact on company reputations and business if they don't carefully and fully assess a candidate's positions," said Tim Smith, a senior vice president at Walden Asset Management, one of three asset management firms that this week filed a resolution asking the retail giant to overhaul its campaign donation policies. He cautioned that funding ballot initiatives, as many corporations have done, "can similarly backfire."
Some of the investors appear concerned about the value of the Target shares in their portfolios.
Such noises from investors could set off alarm bells for Target's corporate lawyers. When shareholders start blaming a company's controversial actions for hurting the value of their shares, lawsuits sometimes follow.