Unilever shares battered after CEO warns that rise of White Nationalism threatens oral care division
Unilever (UL) shares fell 5% after hours on Friday following a profit warning stemming from flagging product sales in the conglomerate’s toothpaste and oral products division. During a call with analysts to address the burgeoning inventories and depressed margins threatening the company’s cash flow profile, CEO Paul Polman sounded less than upbeat. “With the current political environment—and we mean explicitly the rise of the Alt-Right and White Nationalism—less and less people are brushing their teeth and flossing on a regular basis.”
Pressed by Martin Deboo of Jefferies on what might precede a turnaround in the besieged division, Polman struggled to see a way out. “We’ve run the analytics and the decline in oral hygiene in America is inversely correlated with Fox News viewership ratings. And our focus group findings leave us less than sanguine. In a sample of alt-right adult males ranging in age from 25-40, less and less of them find time to brush their teeth and floss, preferring instead to engage in incest, Zionist conspiracies, and commenting on Zerohedge.” Over 8 million shares traded hands in the 5 minutes following those comments.
RBC analyst James Edwardes Jones pressed Polman on his plans for the business. “If we see an increase in turnover in Republican districts i.e., mainline Republicans losing to populist primary challengers, then we might have to seek a buyer for the business. There will be more on that following midterm elections.”
Not everyone was so downbeat, however. Mark Spitznagel, CIO of tail-hedge fund Universa Investments, expects to book upwards of $500 million in profits when put options resume trading Monday. We asked him how he spotted the investment opportunity. “Well I’m a regular speaker at conferences for Austrian Economics enthusiasts, and let’s just say that over the years there’s been a growing gap—no pun intended—between people opposed to fiat money and their per capita share of the overall population’s tooth count.”
When pressed on the disconnect between the company he keeps and his investment performance, Spitznagel was blunt. “Look, you’re just a journalist, so you won’t understand, but I’m a trader, first and foremost. I don’t let sharing ideas with troglodytes jeopardize my clients’ portfolio performance. Period.”
To better understand flagging oral care product demand at the consumer level we travelled to Shelbyville, TN to attend a “White Lives Matter” rally. Early Saturday morning, we were introduced to a local political activist, Cletus Cantreed, who lounged on the hood of a car while fellow activists waved away flies with Confederate flags. Mr. Cantreed, who finds less and less time to brush and floss while fighting a nasty custody battle over the two children resultant from a marriage to his sister, sounded upbeat.
“When I see folks carrying on about fresh breath and smelling good, I think one of three things: liberal, homosexual, atheist, or college professor. When I pull up to Sunday dinner and I get out of my car and Black Betty’s playing and them cousins come ‘a runnin, hell, you’d reckon halitosis might be some kind of aphrodisiac. Maybe it’s just my membership in the Master Race, I don’t know.”
We doubt investors in UL stock will view Mr. Cantreed’s commentary so optimistically. As we left the rally, a nearby Walgreens—and thankfully for Unilever its oral care products inventory—was engulfed by flames following an attack by a Molotov cocktail-hurling white supremacist. No doubt many financial professionals worry the blaze might serve as an allegory for Unilever’s future.