Nike’s stock price has taken a bit of a hit on the morning after Duke’s Zion Williamson had his foot go through his shoe in front of a national television audience. Prior to the game, Nike’s stock was priced at $84.84 and has dropped more than a dollar in the early hours of the market down to $83.60, per Yahoo Finance.
CNBC advised stockholders not to overreact to the incident as the majority of Nike’s sales do not come from serious athletes.
“Nike senior management has a history of acting masterfully at always protecting and enhancing the company’s brand image with core customers, even through moments of pronounced consternation,” Oppenheimer analyst Brian Nagel told CNBC. “If Nike stock gets hurt on the Zion news, we would be buyers on weakness. Nike generates the vast majority of its sales from lifestyle or fashion categories (this includes Jordan) and we think it’s unlikely this part of the business gets hurt as these aren’t serious basketball athletes.”
Nike’s stock price has steadily risen from what it was a year ago. CNBC detailed how Nike has compared to other competitors such as Under Armour over the last year.
Nike shares were down 1 percent Thursday morning. The stock, which has a market value of $132.1 billion, has risen 25 percent over the past year, and is up more than 13 percent since the start of this year. By comparison, rival Under Armour has a market cap of $9.6 billion and its stock has gained 25 percent over the past year, and is up 21 percent since the start of the year.
Some Investors View the Zion Williamson Incident as an Opportunity to Buy
If the stock continues to drop, some investors may take Nagel’s advice and look to purchase Nike stock as others prepare to jump ship. We will see just how far the stock price falls by the end of the day.
Both Duke and North Carolina are Nike schools. Zion Williamson was wearing the Nike Paul George model when the incident occurred and was not able to return to the game. Williamson is the favorite to be the No. 1 pick in the 2019 NBA draft.
It has been a difficult week for Nike given there are also technical problems with the new self-lacing Adapt BB shoes. Nike released the shoes over NBA All-Star Weekend, and the sneakers are designed to be adjusted through an app. Android users are having issues using the app. The Verge detailed the problem for Android users.
Nike’s brand-new Adapt BB smart sneakers have stopped working for some users because of a bad Android update just days after they were released. Affected owners say either their left or right shoe no longer pairs with Nike’s app, meaning it can’t be used to tighten their fresh pair of $350 self-lacing shoes…
The issue appears to stem from an early version of the software built into Nike’s sneakers. Some sneakers weren’t shipped with the latest version of the software, and if they don’t receive the update in time, the pairing process with the latest Android app can lead to them locking up.
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Nike Stock Price Down as Market Reacts to Zion Williamson’s Shoe Explosion