A political controversy made Nike (NKE) shares drop about 3% in today’s trading session. It all started when Colin Kaepernick, now a free-agent and former offensive lineman of San Francisco 49ers who played in NFL from 2011 to 2016, tweeted on Monday that he will be featured in Nike’s ad campaign of the “Just Do It” slogan as part of the shoemaker’s 30th anniversary celebration.
In 2016, Colin Kaepernick chose to kneel down on his one knee rather than the usual practice of standing up for the US national anthem. Kaepernick said that he did this to voice his opinion against the racism in the US. After this incident, he couldn’t participate in the NFL and he filed a grievance against the NFL during the end of 2017 for not selecting him. On August 28, 2018, an arbitrator denied the NFL’s request to have Kaepernick’s collusion complaint dismissed.
Meanwhile, President Donald Trump has been tweeting for quite some time against the players for not giving respect to the US national anthem. POTUS recommended that either NFL should ban or suspend the players who fail to stand up for the national anthem. In response to his tweets, some players have stayed in the locker room or knelt down when the national anthem was played.
There were comments in social media both against and favoring Nike’s decision to have Kaepernick, who received the Ambassador of Conscience award from Amnesty International in this year, in the company’s ad. Trump supporters have uploaded videos and images of burning Nike’s shoes and apparels and some people have welcomed Nike’s decision. “#NikeBoycott” has been one of the top trending hashtags in the social media. However, Kaepernick hasn’t responded to those who are against him through his social media accounts.
Last month, Nike met with a controversy over gender discrimination from ex-employees and they filed a lawsuit against the company. The company reported positive growth in the North America region for its recently ended quarter after reporting negative growth in the last three quarters. Revenue in the North America region grew by 3%. The stock, which hit a new 52-week high ($83.68) on August 22, has surged about 50% in the past one year and about 28% in this year.
While rival Under Armour’s (UA, UAA) shares traded up in the positive territory, the slide in Nike shares was one of the main reasons for Dow’s fall in Tuesday’s morning trading session. Some analysts expressed their opinions that this would be a temporary setback for Nike and in the long term, this will not affect the stock movement of the company.