Fact Check: Did Anheuser-Busch Lose $4bn Value Amid Dylan Mulvaney Issue?

Culture war arguments around the visibility of trans people have magnetized toward beer brand Bud Light after it employed Dylan Mulvaney as a promoter on Instagram, incensing conservative voices online.

Some have suggested boycotting the company behind Bud Light, Anheuser-Busch InBev, for its use of a transgender celebrity in its advertising.

Although it's unclear what impact this boycott may have on the company's sales, some commentators suggested the move has cost it billions of dollars in value.

The Claim

A tweet by conservative commentator Matt Walsh, posted on April 11, 2023, viewed 8.4 million times, said: "The Dylan Mulvaney endorsement cost Anheuser Busch four billion dollars so far. That's because we spoke out loudly and made them pay the price.

"Some conservatives say we should have ignored this issue. Would it have been better if Bud Light paid no price at all? Is that what they'd prefer?"

The Facts

Since Mulvaney posted an ad on Instagram for Bud Light on April 1, 2023, the company's market capitalization has fallen by somewhere around the amount quoted by Walsh.

While it is not the only way to value a company, market capitalization provides a value based on the total number of outstanding shares (total company stock held by its shareholders) multiplied by the price of a single share.

Although analysts have used a variety of figures, the difference between its market cap from when the video was posted until April 11, 2023, is about $4 billion.

The $4 billion figure began being quoted around April 10, 2023.

Twitter user @DC_Draino tweeted a market cap report from the website YCharts, which stated that between March 31 and April 10 Anheuser-Busch's declined from $132.38 billion to $128.42 billion.

This, however, was based on the claim the company's total number of outstanding shares amounted to 1.98 billion, a figure Newsweek has been unable to verify independently.

According to its most recent Securities and Exchange Commission (SEC) filing, Anheuser-Busch had 1,737,191,283 outstanding shares as of Q4 2022.

If we use this outstanding shares figure to calculate market capitalization, Anheuser-Busch's cap fell by $4 billion if we selectively pick share prices.

For example, If we only look at the closing prices before the ad ($66.39) and the lowest price recorded between then and Matt Walsh's tweet ($64.03), there is a $4 billion decrease in market cap value (falling from $115 billion to $111 billion).

However, if we compare the closing price before the ad with the day Matt Walsh sent his tweets ($64.96) the difference was only $3 billion.

This doesn't change the thrust of the claims dramatically. In fact, as of Wednesday, April 12, 2023, the share price closed at $63.38, a reduction in Anheuser-Busch's market cap of $5 billion since March 31, 2023.

At the time of writing, on April 14, the share price is $64.34.

However, suggesting Mulvaney's involvement in the company caused the $4 billion decrease is a matter of opinion.

While the Mulvaney controversy has plausibly influenced the valuation, in the context of heavy criticism and threats of boycotts among what is considered its traditional consumer base in the U.S., other factors were likely at play, too.

Mulvaney may have been the catalyst for some investors to rethink and take into consideration a number of pre-existing reasons for them to sell, as noted by analysts.

For example, Anheuser-Busch's share price has been increasing significantly since mid-March, rising by around 18 percent between then and the end of the month. The recent decrease in value could be caused by profit-taking traders who think the share price is near its peak.

Early on March 31, markets news service BNK Invest noted that the company's shares had "crossed above the average analyst 12-month target price".

"When a stock reaches the target an analyst has set, the analyst logically has two ways to react: downgrade on valuation, or, re-adjust their target price to a higher level," the article said.

It later continued that "with BUD crossing above that average target price of $66.25/share, investors in BUD have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $66.25 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table?"

Jonathan Weber, an analyst for the trading site Seeking Alpha, argued that the Mulvaney controversy appeared negative for investors, but that it was not the only thing giving them pause to think about their holdings in Anheuser-Busch.

Weber wrote that the company had not been able to "deliver compelling growth in the past", highlighting that revenue in the last five years fell far below cumulative inflation, which "suggests that the company doesn't have a lot of pricing power."

Other vulnerabilities included growing competition from smaller breweries, a 30 percent decline in gross profit in real terms, and a net debt position of $69.7 billion.

"Right now, it looks like this ad campaign was a failed one, as it does not look like it generates additional sales and profits for the company," he wrote.

"That being said, it is also far from guaranteed that there will be a long-lasting negative impact from boycotts.

"Still, the ad campaign and the reaction by some customers add risks to an investment in BUD stock, and since BUD doesn't look like a good investment even without this new development, I doubt that BUD is a good buy today."

Macroeconomic factors, such as the decision by the oil cartel OPEC+ to cut more crude oil from its supply could too have cut into the company's share price as investors weigh the potential business impacts.

Even at its current valuation, some experts believe the share price of Anheuser-Busch could increase despite the conversation around Mulvaney.

Financial markets website TheStreet, noted in a technical analysis that the share price recently hit a 52-week high, which it argued could trigger bullish traders to seek higher highs.

The article adds that even more buyers could flock to Anheuser-Busch if the price fell to $62, a prior level of push and pull trading resistance, it reported.

Looking further back, the company has seen large gains in the past seven months or so. By the end of March 2023, the stock had risen 47.7 percent since closing in September 2022 at $45.16.

Furthermore, the change in share price since the Mulvaney ad does not fall far from other recent fluctuations either.

For example, between March 3 and March 7, 2023, the share price fell from $62.08 to $59.78, representing a reduction in market cap from $107 billion to $103 billion, the same amount quoted on Twitter.

Again, this is not to say that the Mulvaney conversation and Bud Light boycott has had no influence on the price. But other business and economic factors that may influence investor decision-making are important contexts to consider.

Newsweek has contacted Anheuser-Busch for comment.

The Ruling

Needs Context.

Depending on how you cut it, Anheuser-Busch's market capitalization has decreased by around $4 billion since the Dylan Mulvaney ad was published.

This figure is constantly shifting as the share price moves around.

However, the drop does not prove that a boycott of Bud Light products alone has had this effect. The change in price is not far off other fluctuations prior to the Mulvaney ad.

Furthermore, Anheuser-Busch's share price has been increasing steadily since September 2022, hitting a 52-week high in March. It may be that the price changes are a result of a market correction or trading resistance between bull and bear traders, as suggested by analyst opinion.

While the Mulvaney ad may have had an effect on the share price, other significant factors were also likely to have affected investor decision-making. The extent to which each factor is responsible for the share price moves is a matter of opinion.

FACT CHECK BY Newsweek's Fact Check team