Over 90 Minutes, Some $20 Billion in Wal-Mart's Stock Value Was Erased David Francis - Foreign Policy
go to original October 15, 2015

Those who watched the first Democratic presidential debate on television Tuesday night probably noticed commercials like the one below, created by the United Food and Commercial Workers International Union (UFCW). It calls on Wal-Mart, the American retail giant, to raise wages and improve employment practices.



Wal-Mart has taken small steps to pay workers more. In April, it raised its minimum starting hourly salary to $9 and on Wednesday, Wal-Mart’s CEO, Doug McMillon, said he still plans to raise it to $10 in 2016.

But it comes at a price: an additional $2.7 billion in projected expenses over the next two years. Combine that with lower sales and flat revenue projections, and the company’s stock suffered on Wednesday its worst day of trading in 15 years.

Check out the chart below. It shows the price of Wal-Mart Wednesday morning, as the company announced its earnings projections. Over 90 minutes, some $20 billion in value was erased. Wal-Mart’s stock eventually closed down 60.03 points.



McMillon said he was still committed to increasing pay because it was “the right decision to make.” But what happened to his company’s stock shows that Wall Street is impatient and could give other firms caution on bumping up salaries. A 10 percent daily drop in stock price is enough to make any CEO think twice about upping pay and other benefits.

Read the rest at Foreign Policy

Related: Wal-Mart Mexico Soars as U.S. Parent Struggles (Bloomberg News)

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