In the charged atmosphere leading up to the upcoming elections, tech CEOs have largely refrained from taking public political stances. This restraint, initially perceived as arrogance, now appears to be a calculated move.
The recent #CancelNetflix trend sparked by Netflix co-founder Reed Hastings’ public endorsement of Kamala Harris underscores the potential backlash CEOs face when diving into politics.
Many top executives have consciously avoided political endorsements ahead of the elections.
This trend became evident when Reed Hastings, co-founder of Netflix, publicly donated $7 million to Kamala Harris’ presidential campaign.
His optimism about Harris’ chances following Joe Biden’s withdrawal was palpable.
“After the depressing debate, we are in the game again,” Hastings remarked on X, the social media platform owned by Elon Musk. Musk, in contrast, swiftly endorsed Trump following the failed assassination attempt on the former president.
In less polarized times, Hastings’ endorsement might have gone unnoticed. However, the current climate is highly charged, and MAGA supporters quickly launched the #CancelNetflix campaign on X.
Users began posting screenshots of their canceled subscriptions, citing Hastings’ donation as their reason. Trump’s former lawyer, Jenna Ellis, commented on X, “This is only the beginning,” signaling more backlash to come.
This situation illustrates why many CEOs have chosen to remain politically neutral.
Decline in political activities of CEOs
According to a Yahoo Finance analysis, 98% of America’s top 100 companies by size have refrained from financially supporting any presidential candidates. Instead, they have directed their contributions toward Congressional candidates.
As the elections approach, the political atmosphere intensifies. Public opinion is deeply divided, and any expressed support for either side invites significant backlash.
In such an environment, it seems prudent for CEOs to avoid overt political involvement. However, this does not necessarily mean they are completely disengaged. They can still support their preferred candidates indirectly through in-house political committees.
What does it mean for the stock?
The backlash against Hastings’ endorsement has had tangible effects on Netflix’s stock.
Investors are grappling with the potential financial impact of the membership cancellations driven by the #CancelNetflix campaign.
Beyond immediate financial concerns, there is apprehension about Trump’s increasing popularity and his potential to target the company directly in his speeches.
For investors, the current volatility presents a dilemma. They must assess whether holding Netflix stock is wise amid the ongoing backlash from MAGA supporters. The situation serves as a stark reminder of the risks associated with political endorsements in an increasingly polarized society.
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