Why So Many Investors Missed Nike’s Stock Rebound
If you were outraged by the Colin Kaepernick ad, you just don’t get it.
Bloomberg, March 20, 2019
What does the market think of the boycott of Nike? It LOLed at the lack of understanding of who Nike’s customers are and what their business model is…https://t.co/Nk4P02C0zK
— Barry Ritholtz (@ritholtz) September 14, 2018
My insight into Nike comes from a misspent youth as a David Letterman-worshipping sneakerhead. He wore mostly Adidas, and while I own a few pair of those, my shoe closet is more in tune with the sartorial preferences of Jerry Seinfeld towards Nike.
The company is much more than a sneaker and sporting apparel firm – they are fashion powerhouse. Fashionistas, sneakerheads, and traders follow the latest product announcement with baited-breath. Nike makes 1000s of different products, but purposefully keeps the supply of each limited. That turns their products into collectible goods that appreciate over time.
They are not quite Ferrari, but the concept is similar – create an artificial scarcity that sends the value of your goods higher. Play around on sneaker trading sites like StockX or GOAT and you can see how insanely collectible they have become. I paid $180 for these Air Max 97s in October and they now trade for about $800 on Stock X. Want to buy my brand new in the box size 10s? It will cost you $769. Other sneakers are trading for $1000s of dollars.
All of which is of course, market related . . .
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I originally published this at Bloomberg, March 20, 2019. All of my Bloomberg columns can be found here and here.
