Go Woke, Stock Gets Smoked

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In 1990, a North Carolina Democratic Senate hopeful asked Michael Jordan for an endorsement.

Jordan refused, famously quipping, “Republicans buy sneakers too.”

Smart man. With great marketing and fresh designs, Nike and Jordan made billions of dollars together. And built a great American success story.

But in the decades since, Nike has not followed its biggest partner’s advice. Beginning in the 2010s, the company became increasingly political.

A key moment came in 2018, when Nike signed Colin Kaepernick to a big ad deal. Kaepernick had become a controversial figure after kneeling during the national anthem.

One of Nike’s Colin Kaepernick ad campaigns

The ads appeared to work, at first. The controversy was front-page news across the country. Online sales saw a temporary bump, and the stock rose.

But all was not well. Sure, Nike had created a lot of media buzz, but they’d also angered a big portion of their customers.

A brand poll released after the ads showed major damage. Axios:

A new poll from Morning Consult shows that Nike’s brand favorability has dropped 34 points from a net +69 favorable impression (76% favorable, 7% unfavorable) among consumers to a net +35 favorable impression (60% favorable, 24% unfavorable).

Nike continued to double down. During the George Floyd riots, the company lectured its customers further with intense woke messaging.

And in April of 2023, Nike pulled a Bud Light by hiring transgender influencer Dylan Mulvaney. Literally the same person that had just caused Bud Light sales to crater. Many female athletes, already sick of men invading their sports leagues, were outraged.

Then came an ad celebrating the U.S. National Women’s Basketball team’s 7th consecutive gold medal. And don’t get me wrong, 7 gold medals in a row is a remarkable achievement.

Nike’s Greatest Dynasty ad – Youtube

But they didn’t have to make the ad so political. Here’s an excerpt:

Today I have a presentation on dynasties, but I refuse to talk about the ancient Greeks and Romans. That’s just the patriarchy.

Instead I’m going to talk about a dynasty that I actually respect. An all-women dynasty. Women of color. Gay women. Women who fight for social justice. Women with a jump shot.

A dynasty that makes your favorite man’s basketball, football, and baseball teams look like amateurs. A dynasty with fire braids. A dynasty with sick style. A dynasty with crazy dimes. A dynasty that makes Alexander the Great look like Alexander the okay.

Why were we getting lectured about the patriarchy during an NFL game? Just… painful to watch a company destroy itself like this.

A company that built itself on Michael Jordan’s alpha male brand, reduced to making social justice ads.

Not caring if they alienate half their customer base.

Fruits of Political Advertising

So what happens when one of the world’s most lucrative brands cares more about social justice than making great gear? A big chunk of its customers jump ship, sales crater, and the stock plunges.

Below is a 5-year chart of Nike (NKE) shares.

Source: Google Finance

The stock is now down 76% over the past 5 years. Oof.

I know that I’ve stopped buying Nike shoes. The quality has gone downhill, and Asics are my top pick now.

It’s noteworthy that Asics, a Japanese shoemaker, hasn’t gone woke. Their ads focus on the quality of their products, and the mental benefits exercise can bring. They don’t get political. Now that’s smart.

Let’s see how Asics shares are doing. Here’s a 5-year chart:

Source: Google Finance

Well look at that. Asics shares are up 687% over the past 5 years. So this clearly isn’t an industry-wide problem. It’s a Nike problem.

Asics is focused on making great athletic gear and marketing it smartly. Nike, meanwhile, is in self-destruct mode.

Nike should remember the words of Michael Jordan.

Republicans buy shoes, too.

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