Opponents of Nike’s new ad campaign involving Colin Kaepernick are getting some delight in seeing the company’s stock drop ever since the Labor Day announcement. However, the notion that Kaepernick alone is responsible for a drop in the company’s stock price might be exaggerated.
Nike’s stock price is down a modest 2.7 percent since the market reopened on Tuesday. While some may be celebrating that, the truth is Nike’s industry competitors have seen stock prices decrease even further.
– Puma is down 4.9 percent
– Adidas is down 4.4 percent
– UnderArmour dropped 1.45 percent on Wednesday
The sports apparel sector seems to be down as a whole, and Nike is right in the middle of the pack for declines. If Kaepernick were as impactful as some would like to believe, it would be reasonable to expect a) Nike’s stock to have dropped even more than it did and b) Nike’s competitors to see growth.
Additionally, the S&P 500 as a whole is down a tick since Tuesday.
2.7 percent really is a modest price change for a stock rather than an indication of some sort of revolt. If you want to get an idea of a true stock price drop, look at what happened to Facebook when it dropped nearly 19 percent in one day in late July due to lower revenues.
Perhaps Nike will see a decline in their stock over the rest of the year that some will attribute to Kaepernick. But the Swoosh is likely betting that any boycotts of their gear (which we’ve already seen) will likely be far outweighed by gains from fans enthusiastic about supporting the brand.
H/T Charles Robinson