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Nike's stock reaches all-time high after Colin Kaepernick ad controversy

Nike's stock reaches all-time high after Colin Kaepernick ad controversy
Posted at 8:36 AM, Sep 14, 2018

On Friday morning, shares of Nike reached an all-time high.

The stock was up nearly 2 percent since before the company launched a campaign with controversial NFL player Colin Kaepernick.

Nike stock has increased 33 percent in 2018, according to CBS News. Online sales of Nike products were up 31 percent from Sept. 2-4. That's almost double the same time period one year ago.

Nike's decision to make the former San Francisco 49ers' quarterback a centerpiece of its 30th anniversary "Just Do It" campaign was a shrewd investment in its core customers: Younger Americans.

Among people ages 18 to 34, 44 percent supported Nike's decision to use Kaepernick, while 32 percent opposed it, according to an SSRS Omnibus poll provided exclusively to CNN. In the 35-to-44 age bracket, the decision earned support among a majority, 52 percent, compared to 37 percent who were against it.

Older adults were less supportive of the move: Only 26 percent of adults over 65 backed the decision.

But they are not Nike's base. Two-thirds of the company's sneaker customers are younger than 35, according to Matt Powell, a sports retail analyst at market research firm NPD Group.

Nike carefully weighed its choices with Kaepernick, and placed a strategic bet on the athlete-turned-social activist.

Kaepernick— the polarizing quarterback who began raising awareness about police brutality and racial injustice by sitting and later kneeling during the national anthem at football games in 2016—announced the "Just Do It" ad with a photo on Twitter Sept. 3.

"Believe in something. Even if it means sacrificing everything," he said. A television version of the ad, narrated by Kaepernick, first aired during the NFL's season opener last Thursday.

The ad provoked backlash from some who believe his protest during the anthem was disrespectful. Some people posted pictures cutting their Nike socks, burning their Nike shoes, and #BoycottNike started trending.

But the boycott proved fleeting and had no impact on half of Americans' views about the company, the poll found.

The ad resonated with Nike's customer base and bolstered its relationships with sponsor athletes such as LeBron James and Serena Williams, Camilo Lyon, an investment analyst at Canaccord Genuity, argued in a research report upgrading Nike's stock.

"This premeditated move was another subtle but significant sign of [Nike's] strength and confidence in its position in the marketplace, one that likely does more good than harm," he said.

The poll shows a sharp split along age, class and racial lines on Nike's ad campaign.

A plurality of poll respondents, 41 percent, opposed the company's choice of Kaepernick, while 37 percent supported the move. The rest were unsure.

But a majority of African-Americans and college-educated Americans supported the ad — 68 percent of black people approved, while only 16 percent were against it.

Polling information is from CNN.