Nike Stocks Increase 2%, about $3 billion, after 4th of July Shoe Pulled

Nike generated $3 billion after controversy with former NFL star and activist Colin Kaepernick—who is also the new face for the brand—to pull its “Air Max 1 USA” sneakers.

What We Know:

  • Kaepernick was concerned with the “Besty Ross Flag” design. The flag was designed by Betsy Ross during the American Revolution and was used from 1777 to 1795 to represent the 13 original colonies. However, the flag also represents an era of slavery. According to the Wall Street Journal, Kaepernick noted that the design was “offensive due to its alleged association with extremist organizations.”
  • Nike released several statements about their decision to pull the sneaker. The first stating “it featured an old version of the American flag.” Later saying “We regularly make business decisions to withdraw initiatives, products and services. NIKE made the decision to halt distribution of the Air Max 1 Quick Strike Fourth of July based on concerns that it could unintentionally offend and detract from the nation’s patriotic holiday.”
  • Trading Nike shares are currently up to $88.36 and the company’s market value is now $138.88 billion. Nike boosted revenues by 4% to just over $10 billion. North America sales were up 8% to $4.17 billion, which is nearly 40% of the company’s revenues.
  • Nike received a lot of mixed reviews in regards to their decision. Arizona Governor Doug Ducey expressed his disappointment with the retail giant in a series of tweets, saying that Nike “has bowed to the current onslaught of political correctness and historical revisionism.” Ducey went on to say that he will cancel the incentive for a Nike plant which, according to the New York Times, would’ve provided jobs to over 500 people.

Kaepernick has been under contract with Nike since 2011 and became the face of the company’s “Just Do It” campaign back in September 2018.