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Source: Seeking Alpha
Anheuser-Busch: Go Woke, Go Broke? Not Likely
April 17, 2023 | BUDFFHEINY, HINKF | 542 Comments
Summary
The Controversy
Anheuser-Busch InBev (BUD) has been in the news for what passes as controversy these days as conservative pundits and some on social media have called for a boycott of the company's signature Bud Light beer. I'll keep the recap brief since this has been discussed to death, but basically, AB InBev sponsored Dylan Mulvaney, who is transgender, to promote Bud Light on Instagram for a March Madness advertisement. The whole clip is about 50 seconds long and is a pretty standard pitch. In response, some on social media called for a boycott of the beer. That's pretty much it.
BUD stock initially took a dive as major media outlets picked up the story, but has since ticked back up:
I was waffling on whether to tackle this at all, but I have seen a number of questions and countless heated discussions on Seeking Alpha comments sections and across the Internet in general about how the current state of affairs will affect the prospects of AB InBev's stock, so I thought it might be worth sharing my two cents. Not because I think my opinion is any more valid than anyone else's mind you, but because I'd like to provide a more contextual approach that I feel could bring some clarity to any investors feeling unsure about the situation.
The Social Media Boycott
This is not the first boycott born of social media outrage, nor will it be the last. However, as has been evidenced by the history of these campaigns, it is considerably easier to generate buzz and get people talking about something than it is to get those people to actually do something. The viral news cycle has a way of making things feel more widespread, relevant, and important than they really are, especially when it comes to companies or stock prices. There are myriad instances of this.
One such example was when, in 2020, the CEO of Goya Foods praised then-President Donald Trump during a White House visit, which elicited calls for a boycott from liberal-minded folks. Cornell University conducted research on what effect, if any, this had on the company's sales. Interestingly, they found that in the two weeks following the outbreak of the controversy, Goya sales increased by 22% despite an analysis of Twitter data showing that tweets criticizing Goya far outnumbered those supporting company. Further, they found that most of the sales increase was derived from Republican-voting areas of the country, which is likely evidence that there was a so-called "buycott" in support of the target of the boycott.
Please go to Seeking Alpha to continue reading.
Source: Seeking Alpha
Anheuser-Busch: Go Woke, Go Broke? Not Likely
April 17, 2023 | BUDFFHEINY, HINKF | 542 Comments
Summary
• AB InBev has been embroiled in what passes for controversy these days as a Bud Light ad campaign ruffled some feathers.
• The backlash has taken social media by storm as some popular conservative figures have called for a boycott.
• This boycott, like almost all others that are jump-started by social media outrage, will fizzle out and be forgotten in a couple of months.
• AB InBev is a global company with a massively diversified revenue stream. This "controversy" is barely even a blip on the radar for the company's long-term prospects.
Bryan Bedder/Getty Images Entertainment
The Controversy
Anheuser-Busch InBev (BUD) has been in the news for what passes as controversy these days as conservative pundits and some on social media have called for a boycott of the company's signature Bud Light beer. I'll keep the recap brief since this has been discussed to death, but basically, AB InBev sponsored Dylan Mulvaney, who is transgender, to promote Bud Light on Instagram for a March Madness advertisement. The whole clip is about 50 seconds long and is a pretty standard pitch. In response, some on social media called for a boycott of the beer. That's pretty much it.
BUD stock initially took a dive as major media outlets picked up the story, but has since ticked back up:
Data by YCharts
I was waffling on whether to tackle this at all, but I have seen a number of questions and countless heated discussions on Seeking Alpha comments sections and across the Internet in general about how the current state of affairs will affect the prospects of AB InBev's stock, so I thought it might be worth sharing my two cents. Not because I think my opinion is any more valid than anyone else's mind you, but because I'd like to provide a more contextual approach that I feel could bring some clarity to any investors feeling unsure about the situation.
The Social Media Boycott
This is not the first boycott born of social media outrage, nor will it be the last. However, as has been evidenced by the history of these campaigns, it is considerably easier to generate buzz and get people talking about something than it is to get those people to actually do something. The viral news cycle has a way of making things feel more widespread, relevant, and important than they really are, especially when it comes to companies or stock prices. There are myriad instances of this.
One such example was when, in 2020, the CEO of Goya Foods praised then-President Donald Trump during a White House visit, which elicited calls for a boycott from liberal-minded folks. Cornell University conducted research on what effect, if any, this had on the company's sales. Interestingly, they found that in the two weeks following the outbreak of the controversy, Goya sales increased by 22% despite an analysis of Twitter data showing that tweets criticizing Goya far outnumbered those supporting company. Further, they found that most of the sales increase was derived from Republican-voting areas of the country, which is likely evidence that there was a so-called "buycott" in support of the target of the boycott.
Please go to Seeking Alpha to continue reading.
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Always understand the upper wealthy cosmopolitan class never get hurt in temporary financial and corporate turbulence. The Anheuser-Busch CEO Brendan Whitworth pulls in $12 million a year.
Always understand the upper wealthy cosmopolitan class never get hurt in temporary financial and corporate turbulence. The Anheuser-Busch CEO Brendan Whitworth pulls in $12 million a year.
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