Nike Inc shares fell the most in more than two months, erasing much of the gain that followed strong earnings results last week.
Shares of the world’s biggest sports apparel and footwear company tumbled 5.9 percent to US$68.10 in New York, the biggest loss since Oct. 10.
The drop was likely a product of the current market, where investors are making emotional decisions in the wake of losses, and less about Nike specifically, said Simeon Siegel, an analyst at Instinet LLC who recommends buying the stock.
However, it came a day after LeBron James, one of the company’s biggest stars, apologized for posting lyrics about “Jewish money” on Instagram.
“Investors are struggling because rationality is not driving stocks right now,” Siegel said. “The stock was up 7 percent or so the day before, which by extension means it has to be down today in this market.”
Nike on Friday last week posted second-quarter earnings that beat estimates, including strong sales growth in its two most important markets: North America and China.
It was company’s first earnings report since it featured Colin Kaepernick in a “Just Do It” ad campaign.
James on Sunday apologized for posting lyrics from the song ASMR by hip-hop artist 21 Savage as he rode in a vehicle.
“Apologies, for sure, if I offended anyone,” James told ESPN. “That’s not why I chose to share that lyric. I always [post lyrics]. That’s what I do. I ride in my car, I listen to great music and that was the byproduct of it, so I actually thought it was a compliment, and obviously it wasn’t through the lens of a lot of people. My apologies.”
“We did see some controversy over LeBron’s posts over the weekend, which could create some headline risks,” Bloomberg Intelligence analyst Chen Grazutis said. “He’s obviously a big asset for Nike both directly through merchandise sales and on the brand marketing side. That said, I am not sure as to how much that would have an effect on the stock today.”
Nike also made leadership changes last week.
On Friday, the company said that Coca-Cola Co executive G. Scott Uzzell would become the next CEO of its Converse brand.
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