Well-Deserved Corporate Takedowns; Instagram Is Toxic For Teen Girls

Published on

Whitney Tilson’s email to investors discussing the most jaw-dropping and well-deserved of corporate takedowns; Facebook knows Instagram is toxic for teen girls.

Get Our Activist Investing Case Study!

Get The Full Activist Investing Study In PDF

Q2 2021 hedge fund letters, conferences and more

The Most Jaw-Dropping And Well-Deserved Of Corporate Takedowns

1) I'm biased, of course, but I think my colleague Berna Barshay's free Empire Financial Daily is a must-read. She and I write our daily missives completely independently and quite differently. While we have similar approaches to investing, I tend to touch on various topics, while she does a deep dive into only one each day.

Yesterday's Empire Financial Daily on teen girl clothing retailer Brandy Melville, The Most Jaw-Dropping and Well-Deserved of Corporate Takedowns, caught my eye because one of my daughters used to be a big fan. But after reading Berna's e-mail, I don't think any of my daughters will ever shop there again... Excerpt:

Business Insider published an explosive exposé last week, based on interviews with more than 30 current and former employees in eight cities, and it became clear that the executives at the company have been incredibly intentional in promoting a vision of beauty that excludes anyone who isn't white, blonde, and extremely thin. According to a former employee, this directive comes straight from CEO Marsan. The employee also offered an origin story for the "one size fits most" strategy...

There was a day when Stephan told us, 'Take everything but the three smallest sizes off the floor' ... From that moment on, we did not carry anything above a size 4.

PS – If you don't currently receive Berna's Empire Financial Daily, simply enter your e-mail address here. It's free!

Facebook Knows Instagram Is Toxic For Teen Girls

2) Speaking of companies doing damage to young women, this article published yesterday in The Wall Street Journal is another must-read. I'm not surprised by the general direction of the findings, but I am shocked at the magnitude of the problem!

Kudos to the WSJ for a piece of reporting that is likely to force Facebook (FB), which owns Instagram, to make long-overdue changes: Facebook Knows Instagram Is Toxic for Teen Girls, Company Documents Show. Excerpt:

"Thirty-two percent of teen girls said that when they felt bad about their bodies, Instagram made them feel worse," the researchers said in a March 2020 slide presentation posted to Facebook's internal message board, reviewed by The Wall Street Journal. "Comparisons on Instagram can change how young women view and describe themselves."

For the past three years, Facebook has been conducting studies into how its photo-sharing app affects its millions of young users. Repeatedly, the company's researchers found that Instagram is harmful for a sizable percentage of them, most notably teenage girls.

PS – I touched on this topic in my recent book, The Art of Playing Defense:

If you are a parent of a teenager or young adult, you need to think especially hard about this risk, as suicide is the third and second most common cause of death for Americans between the ages of 1-14 and 15-34, respectively.

In particular, suicide has skyrocketed among teenage girls: up 151% for younger teens and 77% for older teen girls from the average of 2000-2009 to 2017. Additionally, hospital admissions due to self-harm are up 189% for 10-14-year-old girls and 52% for 15-19-year-old girls since 2009.

Experts aren't sure why, but I think NYU Marketing Professor Scott Galloway nails it when he writes:

"There are many factors, but ground zero is the nuclear weapons [smartphones with Facebook and other social media] we've put in girls' hands to objectify them, perpetually undercut their self-esteem, and enable them to bully each other relationally, 24/7."

Again, to read the rest of the e-mail, click here.

Best regards,