In 2017, a small, elderly man was told to surrender his paid seat and exit an airplane. When he politely refused, he was forcefully removed by security.
The video of Dr. David Dao offering no resistance while being dragged down the aisle of an airliner went viral. Consumers swore to never fly that airline again.
I've asked my adult students. Almost none of them can recall the name of the airline.
In 2010, the Deepwater Horizon oil spill in the Gulf of Mexico generated tremendous anger from consumers, who swore to boycott the culprit.
Do you recall the name of that oil company? Again, few of my students can remember.
This leads to a theory I've been applying for years. When a company is under fire by the public, and consumers threaten a boycott, the immediate reaction is a temporary decline in the stock.
Then, the anger passes, and the stock recovers. First, they get upset, and then they forget.
We saw this happen with BP (BP) in 2010, when the energy giant caused a massive oil spill in the Gulf of Mexico, and with United Airlines (UAL) , the responsible party in the Dao incident.
I think we're about to see it happen again, with shares of Anheuser-Busch InBev (BUD) . The company is under fire for using a transgender influencer in a marketing campaign for its popular Bud Light brand.
There have been numerous articles trumpeting BUD's $5 billion "loss," such as this one.
In reality, InBev's market capitalization, currently $114 billion, declined by less than 5%. Most of that so-called loss has already been recouped. Shared of BUD have gained about 3.6% since the April 12 close.
Chart Source: TradeStation
On Monday, shares of Anheuser-Busch InBev were a mere 2% away from a new 52-week high. BUD has gained 9.3% year-to-date.
On Monday, there were reports of a staggering decline in Bud Light sales. If sales of Bud Light are down sharply, why is this boycott failing to affect the price of the stock?
Certainly, competitors such as Molson Coors (TAP) are benefiting from the controversy, but many of the lost Bud Light sales are likely being redirected to other Anheuser-Busch products. The company produces a variety of U.S. beer brands, including such names as Kona, Stella Artois, Land Shark, Shock Top, and Hoegaarden.
Anheuser-Busch InBev is scheduled to report earnings on May 4. If the stock declines sharply after that report, it will likely create a buying opportunity. As we saw with United Airlines and British Petroleum, this controversy will eventually fade from the memory of consumers.
