Author Topic: Millennials buy up Nike  (Read 534 times)

Offline David in MN

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Millennials buy up Nike
« on: September 24, 2018, 03:17:00 PM »
In a bizarre move Nike chose Colin Kaepernack to be the face of their marketing. I wouldn't have guessed that a retired player with at least a controversial past would carry a company. But I'd have been wrong.

https://markets.businessinsider.com/news/stocks/nike-stock-price-kaepernick-ad-millennials-snapping-up-shares-2018-9-1027507438

After initially dropping on the news millennials flocked and bought it up (at least that's how it's being reported). Funny thing is that none of this  is based on any business metric but squarely on the cross section of business and philosophical belief. If shoe sales drop a lot of young people  might lose money which sucks.

We've seen similar stuff before with investment firms avoiding cigarette and gun makers but to go buy a stock for its stance on a protest is odd. But then I always figured that having a player as a marketing campaign centered on the fact that you watch them perform, not their off-field beliefs. Having a backup QB take a knee isn't exactly the same as Air Jordans (I wanted those so bad as a kid and I capital S Suck at basketball).

It's a little odd though. I find a little bit of traction here. I'd like to see more activist investors. That's how it's supposed to work. I would like to see more boards of directors accountable to shareholders and shareholders taking a stance in businesses. Going public is a sacrifice of ownership. It's supposed to provide funding in exchange for accountability.

I aam a shareholder of Nike (NKE). I have been for a very, very long time. I don't think I use any of their products (sadly those Air Jordans never materialized) but I like their business model. Full disclosure and all.

Offline CarbideAndIron

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Re: Millennials buy up Nike
« Reply #1 on: September 25, 2018, 05:23:21 AM »
Yeah, obviously mainstream news wont also report that for every millennial supporting them, there is a parent like me not buying Nike (we aren't there demo), for us or our kids.
I fully support peoples right to do what Kap is doing (he obviously can't rely on his QB skills), but then I have the right to not support the NFL or Nike. I have a feeling Nike will feel the negatives of this. The common consensus around my office, is the guys saying they are not buying Nike for their families now. And I work for a very large aerospace company in Washington (hint hint), we aren't exactly a bastion for right wing ideals. Although it is certainly no where near as liberal as places in the city...especially seattle.
The millennials may be showing their support, but they are broke idiots. A lot of us with families and expendable income are not on that train, and I think we are a decent representation of a middle class that has no interest in Nike or Kap's situation.
« Last Edit: September 25, 2018, 05:29:17 AM by CarbideAndIron »

Offline Chemsoldier

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Re: Millennials buy up Nike
« Reply #2 on: September 25, 2018, 06:38:55 AM »
I dont know if its going to work out that way Carbide.  Sales up, stock up is what it is.  When Nike is at a steady state and then take an action like this and things go up *shrug*, was Nike supposed to get a bunch of middle class dollars that they were not getting already from no advertising?

The market already seems split up by the large number of choices anyway. I can't buy or not buy Nike because I dont buy their products already and the few products they have I do have need of (running shoes) I have already evolved more specialized choices from other brands. I can't impact them by not buying and I can't find a reason to patronize them if I liked the move.

One other thought. The leading edge of millenials are 37 at this point, many are solidly middle class at this point. Yeah, they got a lot of years ahead but many are not two years out of college anymore.

Offline iam4liberty

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Re: Millennials buy up Nike
« Reply #3 on: September 25, 2018, 07:05:35 AM »
We shall see what the actual sales are when total sales and share of market data is released.  What the media is citing is just a cherry picked, low volume channel number that Nike released itself.  Here's the thing, campaigns like this often dont pay out.  All they do is bring sales which would have happened anyway forward.  So there can be a big lull after initial rise.   So you need to look at total market forca couple quarters to get good grasp on the return.

Offline CarbideAndIron

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Re: Millennials buy up Nike
« Reply #4 on: September 25, 2018, 07:07:33 AM »
Well time will tell, Chem. I think a surge of many people buying to support them is easier to track, than many of us making an effort to avoid them. That will take months to notice. Their stock is up from back-to-school every year at this time anyways.

And I am a millennial (I just puked typing that), by age only. I have 13yrs of experience at my career, and have been part of the middle class for years. I think my using that term is not accurate, since as you mentioned, includes people up to 37yrs old. I would have a hard time finding anyone I know, my age (33), that supports the Kap and Nike stuff. There are a lot of us that actually graduated and got to work. Grew up like we are supposed to. Perhaps the media needs to reevaluate or reclassify their term "millennial".

Offline David in MN

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Re: Millennials buy up Nike
« Reply #5 on: September 25, 2018, 09:07:14 AM »
Here's the thing... you don't know. If any of us could predict the stock market we'd be on a beach with Champagne and our "new friends". I'm guessing Nike has done their homework and attracting young black men who play sports is better than attracting a few old white joggers. I'm with Chem. My running shoes are specialized for my prescription in soles. I'm old  :P.

I'm less interested in whether a marketing campaign works (I've done a few and it's really hit and miss). If Mila Kunis can't convince me to buy Jim Beam Devil's Cut the rest have almost no chance. I frankly don't see why using Kap's face is advertising for a shoe but Nike is legend for marketing so I bet they have a strategy. And if your kid got a free ticket to a quarterbacking class from Kap you'd happily send him. It's not like he's not a great athlete.

I'm more into the idea that young people will put their money behind their ideals. This is a foreign concept. Cigarettes killed my grandfather but I still bought into tobacco companies that offered a good dividend. For as long as there have been investors we have known that all companies do good and bad things so we take the good with the bad. If a company does something horrible we might avoid it but buying in as activism is new.

It's not lost on me that Nike might be a little fast and loose with numbers. It's also not lost on me that they probably use child labor in Asia (again good with bad). But I wouldn't buy or short a company because of their business practices in marketing. Investing is about metrics and data. This feels like a new world.

Offline The Professor

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Re: Millennials buy up Nike
« Reply #6 on: September 29, 2018, 08:57:14 AM »
Smart kids.

Unlike many, they realize that the US is NOT the #1 market, anymore.  Like they were taught by their dwindling opportunities on Saturday Morning TV:  Think Globally.

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Offline CarbideAndIron

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Re: Millennials buy up Nike
« Reply #7 on: September 29, 2018, 11:26:56 AM »
And if your kid got a free ticket to a quarterbacking class from Kap you'd happily send him. It's not like he's not a great athlete.

No, I actually would not. Many great athletes like him, make awful coaches. You can get results from sub par coaching if someone is genetically gifted. But many times great athletes try coaching, and suck. Since almost anything worked for them, they don't know what strategies actually work well, or proper mechanics of the sport.

But I wouldn't buy or short a company because of their business practices in marketing

I like this. Makes sense to be pragmatic, and not let emotions get in the way of your investing. Your family's well being relies largely on your investments.


Smart kids.

Unlike many, they realize that the US is NOT the #1 market, anymore.  Like they were taught by their dwindling opportunities on Saturday Morning TV:  Think Globally.

The Professor

Yeah, the 10yr/2yr spread has me looking more globally right now. It's getting close.

Offline iam4liberty

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Re: Millennials buy up Nike
« Reply #8 on: October 02, 2018, 05:11:47 PM »
Brands represent ~20% of corporate valuation.  So marketing and brand building is critical to financial success.  In fact there is now an ETF that invests specifically in companies whose brands are undervalued.

https://www.etf.com/BVAL#overview

FYI.  You wont see this in news, but Nike execs are leaving in droves.  That online sales bump they reported is gone and sales are plummeting in many states.  Right now they are scrambling to find other athletes to broaden campaign from Kaepernick in hopes of stopping the drops.

Offline iam4liberty

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Re: Millennials buy up Nike
« Reply #9 on: October 02, 2018, 07:15:18 PM »
The company cited in the "31%" sales rise story has released more details.  Here is the breakdown by cities:


Figure 2: "Sales" refers to online sales of Nike products across the web, in terms of total number of orders made by customers. The period of Labor Day (September 3) through September 12 was compared to the period of August 20-29 (the most recent monday-through-wednesday-of-following week period).