These 3 Brands Got Political Over Trump; Here’s What Happened to Their Stock

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.

Share!Tweet about this on TwitterShare on FacebookShare on LinkedInEmail this to someonePrint this page

In the months following the presidential election, a surprising number of well-known American brands got political.

For example, an exec at New Balance Athletics Inc. weighed in on Trump’s victory a day after the election:

“The Obama administration turned a deaf ear to us, and frankly, with President-elect Trump, we feel things are going to move in the right direction,” Vice President of Public Affairs Matt LeBretton said to The Wall Street Journal on Nov. 9.

The remark was a trending topic on social media within 24 hours as staunch opponents of President Trump rallied to punish the 101-year-old brand with a nationwide boycott.

Even worse, New Balance found itself on a website called Grab Your Wallet, which encourages retail activism in the form of boycotting companies that do business with the Trump family or have pro-Trump leadership. To date, there are 64 company names on the site and an estimated 700 million active viewers.

And as more brands find themselves embroiled in President Trump-related controversies, questions are arising over whether any of the backlash will actually have a lasting impact on business…

Brands Get Political to Connect with Consumers

In the months following the New Balance story, companies have been more – not less – inclined to speak out on political and social issues.

For example, after President Trump announced his executive order banning travel from seven countries on Jan. 27, a plethora of brands rushed to denounce — or praise — the decision.

UA

Nike Inc. (NYSE: NKE) Chief Executive Mark Parker released a statement that condemned the action, citing support of Nike-sponsored athletes that were born in Muslim-majority countries as the reason for the outrage.

Starbucks Corp. (Nasdaq: SBUX) CEO Howard Shultz publicly opposed the ban and pledged to hire 10,000 refugees at the coffee giant.

And just this month, Under Armour Inc. (NYSE: UAA) CEO Kevin Plank candidly praised Trump’s pro-business agenda, then subsequently took out a full-page ad apologizing to consumers in The Baltimore Sun after an abundance of negative backlash.

Must See: Get a “Second Salary” with These Easy Investments

“It’s as if America’s corporate leaders have suddenly decided that advocacy is more important than profits,” Forbes reported on Feb. 1. “Or conversely, they’re being savvy, recognizing that we’re so divided as a nation at this point that consumers want to know whether they’re buying red or blue.”

Indeed, we’re seeing some very real repercussions to these brands’ values…

Here’s What Happened When Brands Got Political Over Trump

Branding experts predict that while businesses should be wary of speaking out against the president, the implications of doing so are usually superficial.

“The boycotts will do minimal damage to the retailers’ bottom lines and long-term reputations,” said Robert Passikoff, founder of Brand Keys, a marketing research firm that has studied Trump’s brand power for the past 25 years, to Business Insider on Jan. 21.

In fact, Nike stock has seen an increase of 9.22% since Parker’s remarks last month – from $53.10 to $58.25 today.

Starbucks shares took a slight 0.92% dip after its announcement, but have since rebounded 3.84%.

And Under Armour is up 6.41% – from $20.66 to $21.90.

Bottom Line

Whether brands decide to identify right, left, or in-between – the long-term result will most likely be minimal.

Money Morning Chief Investment Strategist Keith Fitz-Gerald, a seasoned market analyst with more than 30 years of global experience, suggests traders focus instead on what the movement really represents when the political brouhaha starts.

“Protests that do the unexpected are what you want to focus on. They’re the ones that matter because it’s the unexpected that makes stock prices move,” Fitz-Gerald told his readers on Jan. 25.

“The next time you see dissent brewing, don’t just throw up your hands or rush out to join the fracas,” he said. “If you’re an investor, wait until the storm blows over and buy at a discount.”

 

To get full access to all Money Morning content, click here

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

Disclaimer: © 2017 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.

 

The post These 3 Brands Got Political Over Trump; Here’s What Happened to Their Stock appeared first on Money Morning – We Make Investing Profitable.

Wall Street Examiner Disclaimer:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I am also a contractor for Money Map Press, publisher of Money Morning, Sure Money, and other information products. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. In some cases promotional consideration is paid on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.

Leave a Reply