Chanting Points Memo: “Investors Angry At Target!”

It was in all the headlines today:  “Target feeling investor backlash”, screamed the Strib.

Emphasis added:

The backlash from gay-rights supporters against Target Corp.’s recent political donation now includes some institutional shareholders.

Three management firms that collectively hold $57.5 million of Target stock — Walden Asset Management, Calvert Asset Management and Trillium Asset Management — filed a proposal asking Target’s independent board members to undertake a “comprehensive review of Target’s political contributions and spending processes including the criteria used for such contributions,” according to a statement released Thursday night

Sounds pretty serious, huh?

There are two problems with this “story”:

Small Potatoes:  57.5 million dollars in Target stock equals about 0.0015 of Target Corp’s $38,190,000,000 (that’s thirty eight billion dollar and change) market capitalization; fifteen dollars out of every ten thousand worth of Target market capitalization.

That’s like taking fifteen cents out of a hundred dollars.

The amount of Target Corp stock owned by the three firms named in the story would have to move the decimal point a couple notches to even qualify as “pissing in the wind”.

This is not a serious challenge to Target.

But the Star Tribune didn’t figure the Minnesota voter needed to know that.

Who Are Those “Investment Firms”? The Star Tribune, and the rest of the media covering this story, don’t feel it important to elaborate on who the three “institutional shareholders” involved in this “resolution” are.

All three are firms involved in “socially responsible investing”.  Walden is one of a group of investment companies demanding that President Obama create an office of Corporate Social Resopnsibility.

The purpose of the office would be to enhance and coordinate corporate social responsibility (CSR) activities across the government, at home and abroad, and to pursue policies and initiatives to strengthen the CSR commitments of the private sector.

A joint letter from the groups, released today, was organized by the 500-member Social Investment Forum (SIF), the U.S. membership association for socially and environmentally responsible investment professionals and institutions.

Calvert Asset Management also pursues left-friendly policies.

The organizations are asking the SEC to require companies to report annually on sustainability indicators in accordance with the most up-to-date reporting framework of the Global Reporting Initiative and on other material ESG matters as they come to light.

In a letter to SEC Chairman Mary Schapiro that accompanied the proposal, the investors said: “The present global economic crisis has made it readily apparent that our existing system for corporate reporting has failed shareholders. We believe that robust sustainability reporting could have mitigated some of the impacts of the financial crisis. These types of disclosures would have promoted longer-term thinking by investors and corporations, and earlier detection of predatory lending and other destructive business practices. There is a tremendous opportunity to learn from these gaps and to construct a system of safeguards to protect investors. We are confident that mandatory sustainability reporting will contribute significantly to rebuilding public trust in corporations as well as the agencies regulating them in the wake of the present crisis.”

Trillium?  Yep – they’re an investment house that focuses on “Environtmental, Social and Governmental” “investment” – a “movement” focused on bypassing politics to affect policy by jiggering the capital market.

Their performance in the market is a matter of debate, perhaps.

But it’s not debateable that these three investment firms are not random firms purely focused on the non-political, fiduciary interests of the shareholder.  And it’s not up for debate that the three companies all together aren’t even a vaporous fraction of Target’s total worth.

So why does the Strib feel the need to omit all this from their coverage?

Misreporting and incomplete reporting is a pattern.  Two weeks ago, I busted the Saint Paul Pioneer Press claiming that Target’s share values were hurt by the controversy, on a week when the entire mid-to-high-level consumer retail market suffered a setback due to eroding consumer confidence numbers.

Now, this.

Is the Twin Cities’ business press also in the bag for Mark Dayton?  What does this say about the rest of their “journalism?”

15 thoughts on “Chanting Points Memo: “Investors Angry At Target!”

  1. Target is outperforming the S & P during this period of controversy. It may be that Gay clout is overrated or more likely the whole controversy is as significant as attempting to raise the level of the lake by urinating off the end of the dock.

    Good work exposing this farce Mr. Berg. While it’s a little discouraging to find out that the Strib is biased, I am impressed that they suddenly have an interest in business. Perhaps the business section could be expanded to a page and a half.

  2. I do like the St Paul paper, but in the era of huge downscaling of local staff, it appears much of their news comes from national wire services, and there is no fact checking. I find many errors and half truths in the news. One thing they do is an old trick that MSM did to Ronald Reagan (when I started reading newspapers and being aware of what is going on). They quote the liberals extensively on an issue, but just do a one or two sentence summary of what the Republican(s) did, but not in any context.

    “Republican congressmen voted yesterday to cut spending on school lunches for the poor”. Then the rest of the story would be quotes by liberals. There is no context…was it due to waste so the money wasn’t been spent on the poor? Was an alternative program offered? Was it just a procedural vote? Was the spending not geographically balanced? Without any quotes by Republicans, we don’t know why.

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  4. I worked for Target for a long time. They might have been concerned about this sort of thing initially, but it’s going to redound to their benefit in the end. Thanks for providing some badly needed context, Mitch.

  5. Your context is worth reporting. News consumers should be alert to this sort of thing, regardless which side it comes from. And it does cut both ways.

  6. And it does cut both ways.

    I know it does, Charlie.

    But when it cuts the other way, the media seems to do a good job of covering it.

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  8. I did a bit of nosing around to learn more about Walden Asset Management and related companies. They don’t go out of their way to publish rates of return to non-clients, it’s anybody’s guess as to how they fare. They seem to be big on alternative energy companies and they like to send representatives to stockholders meetings to introduce “socially responsible” resolutions. Good for them. If they divest from Target, as you point out, Target will not suffer, and the clients of Walden will have the sensation you get when you wet your pants wearing a dark suit: a warm feeling and nobody notices.

  9. Anyone know anything about Target owning a large amount of vacant land in Sioux Falls? Much more than they would need for any kind of retail store.

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  11. I did a bit of nosing around to learn more about Walden Asset Management and related companies. They don’t go out of their way to publish rates of return to non-clients, it’s anybody’s guess as to how they fare.

    More on this shortly.

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