Nike stock price hits record high after Colin Kaepernick ad

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Shares of Nike hit a record high on Friday afternoon, rebounding from a recent decline spurred by concerns over a consumer boycott after the sportswear maker signed a major agreement with former NFL quarterback Colin Kaepernick.

Shares of the company rose slightly on Friday, closing at $83.49. Since Nike announced the campaign on Labor Day, shares have risen about 4%. Looking further ahead, Nike stock has jumped 33% this year as Wall Street bet the company would be able to ride out the negative publicity. In line sale of Nike equipment jumped 31% from Sept. 2-4, nearly double the company’s sales in the same period a year ago, according to Edison Trends, a digital commerce research firm.

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Kaepernick gained notoriety for kneeling during the national anthem to protest police shootings of unarmed African Americans. He pulled out of his contract in 2017, although there are were reports the San Francisco 49ers were preparing to cut it in the offseason. Afterwards, the quarterback claimed in a lawsuit that the 32 NFL teams agreed to deny him a chance to play for another team. The case is currently in arbitration.

The ad features a close-up of Kaepernick’s face and the tagline “Believe in something. Even if it means sacrificing everything.” The spot proved polarizing, with some consumers expressing their displeasure by burning Nike products. President Donald Trump, who has frequently criticized protests against the anthem, denounced Nike’s campaign for sending a “terrible message”.

“In my opinion, the fans think it is disrespectful to kneel during the national anthem,” Christopher Arps, a member of the conservative national advisory board Project 21, wrote to the conservative publication. The daily caller. “We don’t want to see or hear anyone’s speech or political views. We want to get away for a few hours to watch great athletes entertain us. Especially when we’ve paid a lot of money to watch.”

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The Kaepernick campaign, however, resonates with the company’s core customer base, such as millennials and Gen Zers, “in a way that is authentic, culturally relevant, experiential and emotionally engaging,” according to the analyst. by Wedbush Christopher Svezia.

In a recent client note, Svezia pointed out that Nike gained around 170,000 followers on Instagram as a result of the campaign. Kaepernick’s announcement could become the company’s most liked Instagram post, attracting a record number of comments, although many of those remarks were critical of the company.

“Ultimately, the net subscriber gains and possible record likes of Americans, along with the company’s consumer demographics, lead us to believe that Kaepernick’s advertising campaign was positive for the brand and likely for its sales,” writes Svezia, who notes Nike “outperforms.”

Svezia’s view is supported by recent Harris poll data which found that 29% of young men said they would buy Nike products in the future because of the Kaepernick spot, compared to 19% consumers in general. Consumers who identified as conservative opposed the company’s decision while liberals supported it.

Nike ranks 10th among American companies for brand relevance, according to a survey of 3,000 millennials by brand and marketing consultancy Prophet. The apparel company’s drive to “challenge the status quo”, the quality of its products and its ability to inspire people are why the brand appeals to consumers, said Jesse Purewal, associate partner at the firm. .

Controversy can help consumers talk about a brand, Purewal said. “You are going to invite people to participate in the dialogue that your brand has started,” he noted.

Nike, which has stood alongside other athletes embroiled in controversies such as golfer Tiger Woods, is one of the few brands highly valued by consumers of all demographics, said Scott Davis, Chief Growth Officer of Prophet.

A spokesperson for Nike, based in Beaverton, Oregon, could not be immediately reached for comment.

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