Colin Kaepernick Spurs Nike’s Stock After It Pulled “Betsy Ross Flag” Sneaker
By CultureBanx Team
Colin Kaepernick convinced the company to pull its “Air Max 1 USA” sneakers
Nike has added nearly $3B in market value since cancelling the kicks
Shares of Nike (NKE +0.72%) are rising after former NFL star and activist Colin Kaepernick convinced the company to pull its “Air Max 1 USA” sneakers from store shelves. Kaepernick’s concern over the shoe’s “Betsy Ross Flag” designs connection to an era of slavery resonated with investors, as Nike has seen a 2% stock increase and added nearly $3 billion in market value since cancelling the kicks.
Why This Matters: Nike’s intentions were good as the “Air Max 1 USA” was created in celebration of the July Fourth holiday for $140, however the design was ill advised. Kapernick noted the early American flag with a circle of 13 stars was offensive due to its alleged association with extremist organizations, according to the Wall Street Journal. The flag was originally designed by Betsy Ross during the American Revolution and was in use from 1777 to 1795 to represent the 13 original slave owning colonies.
Playing the long game with Kaepernick seems to be fruitful for the company amidst earlier short term stock market pain. A total of 15,191 investors on Robinhood added Nike to their portfolios when Kaepernick’s ad was released in September 2018, according to Business Insider. Additionally, Nielsen reported 38% of African Americans between the ages of 18 and 34 and 41% of those aged 35 or older said they expect the brands they buy to support social causes.
Nike boosted revenues by 4% to just over $10 billion but missed analyst estimates for earnings. However, the maker of Air Force 1 sneakers missed analyst estimates for earnings in its fiscal Q4. North America sales were up 8% to $4.17 billion in the region which accounts for nearly 40% of the company’s revenues.
Situational Awareness: The “Betsy Ross” shoes were selling at a nearly 2000% premium, on the stock market for shoes known as StockX, before they dropped the sneakers from its site. Also, Arizona Governor Doug Ducey ordered the state’s Commerce Authority to withdraw financial incentives of around $2 million that were to be awarded to Nike for a new manufacturing plant since they pulled the shoes.
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