Target sued by Florida for defrauding shareholders about DEI

Core Viewpoint - Target is facing a securities fraud lawsuit from the State of Florida for allegedly concealing risks associated with its diversity and social initiatives, which resulted in significant customer backlash and a substantial decline in market value [1][3]. Group 1: Lawsuit Details - The lawsuit is the first shareholder action led by a US state regarding Target's alleged mismanagement of diversity, equity, and inclusion (DEI) matters [2]. - Florida accuses Target of misleading investors and its core customer base by making false statements in financial reports about its DEI and environmental, social, and governance (ESG) initiatives [3]. - The lawsuit claims that CEO Brian Cornell downplayed the impact of customer boycotts following a controversial Pride Month campaign in May 2023, which contributed to a decline in Target's share price [3][4]. Group 2: Financial Impact - Following the backlash from the Pride Month campaign, Target removed some LGBTQ-themed merchandise, leading to a decline in share price, which has fallen over 50% from its peak in November 2021 [6]. - On November 20, 2024, Target experienced a 22% drop in share price, resulting in a loss of approximately $15.7 billion in market value after disappointing profit and holiday sales forecasts [7]. - Target announced plans to end its DEI initiatives in 2024, joining other major retailers like Walmart and Amazon in scaling back such programs [7]. Group 3: Context and Reactions - Florida's attorney general criticized corporations that promote what he termed "radical leftist ideology," arguing that such actions jeopardize the financial security of public sector employees [4]. - The lawsuit is part of a broader trend, with similar class actions proposed in early 2023, indicating growing scrutiny over corporate social responsibility initiatives [7].