18.07.2023 – Investing against the tide of the mainstream media: Those who are embraced by them sometimes get into trouble. One example of this kiss of death in the press is Volkswagen. Plus the beer company Anheuser-Busch Inbev – where attentive customers recently discovered a death star for Bud Light.
Let’s look at the USA first. At Anheuser-Busch Inbev, the bottler Ardagh Group has had to close two bottling plants, one in North Carolina and another in Louisiana, because of the collapsing sales of Bud Light. This was because Bud Light, once the leading beer brand, had taken a marketing turn that had been well received in the media: away from babes and barbecue and toward a transvestite as an advertising figure. The result was a boycott by customers. To be sure, Inbev’s stock has recovered recently; here’s the daily chart. That’s because the queer marketing strategy was largely called off and those responsible were fired. But buyers continue to sulk.
Now new trouble is looming: Photos of a “Death Star” at Costco are circulating on social media. This is an asterisk on the price tags of Bud Light, which, according to insiders, signals that the brand will no longer be listed, i.e. removed from the shelves. That would be a major blow because Costco, the wholesaler, operates more than 800 stores in the United States.
Get woke, go broke
And with that, we look domestically. Volkswagen is one of the icons of German industry. But with its pivot to electric cars, the company has taken a dangerous turn. Management has always been celebrated in the green-left media for its ecologically correct course. After all, VW wants to phase out internal combustion cars by 2033, also at the request of politicians, of course.
But now VW’s existence seems to be in danger: Volkswagen is “under enormous pressure from internal and external factors,” Thomas Schäfer, group board member for the core VW brand, recently warned some 2,200 executives. As reported by Der Spiegel, he even reportedly said, “The future of the VW brand is at stake.” The reasons: First, too rigid internal processes and too high costs.
Market versus political media guidelines
But above all, the crisis in e-cars – people are hardly buying. Topics that are rarely covered critically in the mainstream media are the problems with batteries, which are extremely difficult to extinguish in fires and can destroy the entire car. In addition, charging stations are too rare, the range is too short and charging takes too long. Furthermore, e-cars are simply too expensive for many people. Tesla or the Chinese company BYD can produce them much more cheaply. Many also wonder where the energy will come from when the German nuclear power plants are shut down – if France ever needs all of its own electricity, it will no longer be able to export energy to Germany.
The workforce will have to pay the price for this woke decision: VW recently cut production at its e-car plant in Emden, extended the plant vacations by a week and laid off hundreds of temporary workers.
The conclusion to be drawn from all this: remain critical of the zeitgeist, inform yourself outside the mainstream media. And observe whether a group learns from its mistakes – then the share offers recovery potential. Bernstein Bank wishes successful trades and investments!
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