How Much Money Has Nike Lost Because Of Colin Kaepernick
Wall Street seems to think Nike merely blew it with its new ad campaign featuring controversial quarterback Colin Kaepernick.
Shares of Nike (NKE) vicious well-nigh 3% in midday trading Tuesday. #NikeBoycott was a trending topic on Twitter, with some people posting photos and videos of ripped Nike socks and burned Nike sneakers.
Many people besides wrote messages of support for Kaepernick, who famously took a knee during the National Anthem earlier NFL games in 2016. Kaepernick said it was to protest several high-profile shooting deaths of black people by police.
Kaepernick remains unsigned and hasn't played since 2016, but he started a motion that has polarized Americans. President Donald Trump has been disquisitional of players for the protests.
One analyst expressed concerns about Nike'south ties with Kaepernick.
"Nike's campaign will generate both attention and discussion which is, arguably, one of its fundamental aims," wrote Neil Saunders, manager of GlobalData Retail, in a study Tuesday. "Yet, it is also a risky strategy in that information technology addresses, and appears to take sides on, a highly politicized outcome."
The ad could ultimately alienate customers and turn them to rivals' products -- which is not the purpose of a marketing campaign, Saunders said.
One money manager, nonetheless, didn't think Nike would be hurt by any Kaepernick backfire.
"This is a company that'southward not afraid to accept sides," said Tom Stringfellow, main investment officer with Frost Investment Advisors. "Information technology'southward office of the make to be controversial and get their proper name out there."
Related: Nike taps Colin Kaepernick for new advertisement
Nike has weathered other public relations storms this year as well. Trevor Edwards, Nike's brand president, stepped down in March following allegations of workplace misconduct.
Customers didn't flinch. Nike has enjoyed strong sales and earnings this year. Nike's stock is still up most 30% in 2018, even after Tuesday'due south drop.
Related: 2 sometime Nike workers claim 'women are devalued and demeaned' at Nike in lawsuit
Rivals Adidas (ADDDF) and Nether Armour (UA) are thriving, too. Adidas shares are upward more than than 20% while Nether Armour's (UAA) stock has gained more than than forty%.
The increased threat from Adidas and Nether Armour is the main reason Saunders didn't think it was a good idea for Nike to courtroom controversy. He worries that it could damage Nike's market dominance.
"While it is noble to accept a stand on something, information technology is also commercially imprudent to nuance headlong into a very sensitive issue which polarizes stance," Saunders wrote, adding that Nike "cannot afford to brand bad decisions."
The company will report its earnings on September 25. Executives may talk about the new ad campaign and its upshot on sales during a call with analysts.
Source: https://money.cnn.com/2018/09/04/news/companies/nike-stock-down-colin-kaepernick/index.html
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