Anheuser-Busch (NYSE:BUD) is watching shares fall today due to conservative backlash over a recent partnership. The multinational brewing company recently joined forces with Dylan Mulvaney, a prominent TikTok star and influencer within the transgender community. Mulvaney released a video on her Instagram discussing March Madness and promoting Bud Light, one of Anheuser’s top brands. She also noted that the company had issued her a custom Bud can with her face on it. This may seem like standard influencer marketing, but it has triggered an extreme backlash from far-right media personalities, sending BUD stock down in the process.
Does this mean that Anheuser-Busch is destined to keep falling as this reactionary fervor continues? Not necessarily. Let’s take a closer look at this story in context.
What’s Happening With BUD Stock
One week ago, Mulvaney posted the video to her Instagram promoting Bud Light as the March Madness momentum began to subside. It quickly triggered a backlash from conservative political figures, sending BUD stock down. As of this writing, shares are down about 2.5% for the day and don’t seem ready to rally. However, despite its losses over the previous week, BUD remains firmly in the green for the month and is still up almost 9% year-to-date.
This isn’t to say that the conservative backlash against the beer maker hasn’t been severe. Country singer Kid Rock drew controversy when he posted a video of himself destroying multiple cases of Bud Light. Former Trump administration insider turned podcast host Sebastian Gorka shared a video of himself throwing away a Bud Light six-pack. Many other videos have surfaced since then as consumers voice their anger at the brewing company for embracing what they consider to be “woke” politics. The underlying sentiment is clear — they feel that the company that brews one of the country’s most iconic beers has lost touch with its consumer base.
Before writing off BUD stock, however, it’s important to note a few things. Firstly, Anheuser-Busch isn’t the only industry giant to partner with Mulvaney. Nike (NYSE:NKE) recently offered her a partnership even as the Bud Light controversy swelled. TIME reports that Nike has responded to the controversy by stressing the importance of kindness and inclusion. And NIKE stock is rising today while BUD struggles. This suggests that the beer company’s problems may not be entirely due to its work with her. In fact, investors have had some concerns about the company’s fundamentals recently.
Secondly, Bud Light belongs to a company with an unmatched range throughout its industry. While rumors of a boycott have been circulating since Mulvaney’s video post, they likely don’t mean investors should panic. Even if a chunk of its consumer base stops buying Bud Light, Anheuser-Busch has plenty of other beers to keep it in the green. The company also produces iconic names such as Budweiser, Stella Artois, Shock Top, Karbach, and many more. Boycotting the entire company would lead a shopper with very few options from the beer aisle. It is, therefore, improbable that a company-wide boycott will succeed.
What Comes Next
For all the criticism that Anheuser-Busch is facing now, this fad isn’t likely to last long. It is even less likely to impact the company’s long-term growth prospects. Even the people who purchased Bud Light to make a protest video still had to spend money on it. Additionally, BUD stock is the type of company that can withstand unfavorable market conditions. The far-right will soon find something else to be angry with, and when they do, shares will likely bounce back into the green.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
