Hims & Hers Health Inc. (NYSE: HIMS) found itself embroiled in controversy when its CEO, Andrew Dudum, publicly voiced his support for pro-Palestinian protesters. This declaration had a significant impact on the company’s stock price, causing it to plummet by 8% during Friday’s trading session. Although there was a slight recovery of 0.89% during after-hours trading, the repercussions of Dudum’s statements were palpable.
Dudum’s support for the protesters was shared on X (formerly Twitter), where he boldly stated, “Moral courage > College degree.” His message resonated with those advocating for the rights of Palestinians and pushing for their university’s divestment from Israel.
However, not everyone welcomed Dudum’s stance. Several notable business figures, including Palantir co-founder Joe Lonsdale and radio host Jason Rantz, criticized Dudum’s post. The company itself has refrained from making any official comments on the matter, leaving investors and stakeholders pondering the implications.
This controversy struck at a time when Hims & Hers Health Inc. was enjoying a favorable position among investors. Prior to this incident, the company had garnered bullish sentiments, with nine extraordinary options activities indicating a 66% bullish sentiment among heavyweight investors.
Analysts had also been optimistic about the company’s prospects, with an average 12-month price target of $14.5, marking a positive shift of 26.09% from the previous average price target in April.
However, the fallout from Dudum’s remarks could potentially alter this trajectory. Investor confidence may waver, and projections for the company’s future performance could be impacted. The incident underscores the delicate balance companies must maintain between social activism and shareholder interests, highlighting the potential risks associated with taking public stances on contentious issues.