Nike’s prolonged stock-market collapse has erased approximately $200 billion from the sportswear giant’s value since its 2021 peak, prompting Sen. Ted Cruz to revive his criticism of the company and declare that its politically charged decisions drove away customers like him.
Shares of Nike have sunk to levels not seen in nearly 12 years, extending a years-long decline as the company grapples with weakening sales through its direct-to-consumer business.
Cruz, a Texas Republican, pointed to the staggering drop as vindication of his longstanding criticism of Nike, particularly over controversies involving ex-NFL quarterback Colin Kaepernick and the company’s 2019 decision to cancel the release of a sneaker featuring the Betsy Ross flag.
“Sad & predictable,” Cruz wrote on X, saying Nike’s decision to scrap the shoe was how the company “lost me.”
Cruz said he had been an overwhelmingly loyal Nike customer for most of his life before becoming disillusioned with the brand.
“For my whole life, I wore nearly 100% Nike for athletic wear,” Cruz said. “Kaepernick pissed me off, but when they canceled the Betsy Ross shoe it showed that their marketing plan was ‘America-hate’.
“I went out & bought brand new shoes, shorts, and t-shirts.”
Cruz suggested that many other consumers reached a similar conclusion and abandoned the company as well.
“Turns out I wasn’t the only one,” Cruz continued. “#GoWokeGoBroke.”
Nike shares finished trading Monday, Aug. 17, at $39.09, representing a decline of approximately 78% from their November 2021 monthly closing peak of $169.15.
Market strategist Charlie Bilello has characterized the extraordinary fall as the deepest drawdown Nike has experienced since becoming a publicly traded company.
The company’s troubles have been compounded by weakness in the direct-to-consumer strategy that Nike had spent years positioning as a major source of future growth.
According to Nike’s latest earnings release, Nike Direct revenue declined 7% during the company’s fiscal fourth quarter, while its digital business recorded a steeper 12% drop.
Cruz was one of several prominent conservatives who advocated boycotting Nike in 2019 after the company withdrew its planned Betsy Ross-themed sneaker.
Kaepernick, who had already become a deeply polarizing figure after kneeling during the national anthem to protest what he viewed as police brutality, reportedly objected to the sneaker and encouraged Nike not to move forward with its release.
Critics have argued that Nike’s decision to abandon the shoe following Kaepernick’s objections marked part of a broader shift toward progressive political and social causes that alienated some conservative customers. Those critics now point to the company’s current difficulties as evidence that the strategy carried a significant cost, although Nike’s stock decline has also coincided with substantial business challenges, including its weakening direct-to-consumer operation.
{Matzav.com}
