Former San Francisco 49ers quarterback Colin Kaepernick first became the subject of national political discussions after he took a knee during the national anthem at an NFL game, launching him into the spotlight as a social justice advocate. Immediately afterward, sports brand Nike rushed to embrace him and they have been paying for that decision — literally and figuratively — ever since.
The company did experience a brief economic spike in 2021, however, Nike has experienced plummeting profits and a stock crash of 78% since that time. The woke sportswear producer is now, embarrassingly, being forced to leave the S&P 100 later in September as part of the index’s quarterly rebalance. The company was part of the index for 18 years.
Nike, along with three other companies, is set to be replaced by Dell Technologies, Palo Alto Networks, Arista Networks, and SanDisk. Forbes then pointed out that Nike’s fate comes after years of consistent underperformance. The publication then provided details concerning some of the factors that led to the legendary sportswear maker’s downfall.
According to Forbes, a number of issues contributed to the company’s financial woes, including an “over-reliance on old franchises, a flawed direct-to-consumer strategy, weakened wholesale ties, and rising competition from brands like Hoka and On.” The report then said that the shift within the S&P 100 reveals a new market trend toward tech and AI infrastructure instead of traditional large consumer giants.
A report from Breitbart News revealed that Nike stock that has been traded around this summer has hit lows that investors haven’t seen in over a decade and now it faces this new humiliation. The start of the fall of the house of Nike can be traced back to the 15-point hit it took when it associated itself with Kaepernick.
The controversy surrounding the NFL quarterback was such a hot topic at the time that even President Donald Trump felt the need to comment on it, asking on social media, “What was Nike thinking?” which is probably a question they are asking themselves a lot these days. For fans of professional football, Kaepernick’s disrespect for the country, the military, law enforcement, the flag, and the national anthem was just too much.
Ever since then, consumers have distanced themselves from the brand. Nike stock has been on a steady decline since their 2021 peak, which has resulted in a $200 billion loss in market value, all traced back to embracing Kaepernick. The drop in stock prices is a direct result of a massive decline in sales, part of which is due to an inability to keep up with shifts in consumer preferences and other companies in the space rising in popularity.
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Now, with the company set to leave the S&P 100, Nike could be looking down the barrel of its own demise. A brand that at one time was a cultural icon in its industry could now be on its way to becoming obsolete, a thing of the past, all due to its need to get involved with woke activism, lending credence to the phrase, “go woke, go broke.”
Featured Image: screenshot from embedded video