Nike is COLLAPSING - Why The Sneaker Giant is in Freefall-MP3

SPEAKER_1 (0:00)

On the stock market, and this is a story, I actually saw people making their own content off of it, and it's become a thing, because everybody, you know, Jermaine Dupree commented on Rashad to JD, man. Just a solid, solid person, stayed down. But Nike is being dropped from the S&P 100 after falling 80% from its peak, and, you know, losing $230 billion from market capitalization in that time period.

SPEAKER_2 (0:28)

It's tough.

SPEAKER_1 (0:28)

Going from $179 to $38.

And a lot of people have always said, like, invest in companies that you use and that you know. And everybody uses Nike, everybody knows Nike. But it's not a bad piece of advice. Yeah, this definitely is not a company that you should invest in just because you like Jordans.

SPEAKER_2 (0:53)

Which is a lesson in itself.

SPEAKER_1 (0:56)

Freefalling, freefalling, and we talked about Nike a bunch of different times and what they need to do to change it, if they can change, if it's just over.

So what is this? What's the deal with Nike dropping 80% from its all time high?

SPEAKER_3 (1:12)

Can we get a round of applause for Ian for being a bad guy, for telling the truth?

To executive management at Nike, this has nothing to do with you. I'm just breaking down the stock overall. I think the underlying story that's not being talked about enough, I belabor the part about Jalen, Kyrie, Don C, Kanye, Miss Management, their talent leaving out. America economy is weak, and then you didn't do a great enough job marketing to the new generation. And I think there was a bunch of mistakes in hindsight, of course, it's 2020

But the part that's really important, and Apple has done a great job of this, Google kind of slipped with the deep mind, and we talked about it last week, keeping the talent in house that makes the company special is really important. Sometimes leadership thinks, well, because we have the brand, and we have the IP, that's all you need. And sometimes the leavers that move a business forward are some of the unseen talent that you don't always see. And then this connection from who you're selling to versus who you are as an executive is really important. The thing that I loved about Steve, Steve was the creator and innovator. He uses own product, uses own, like ate his own dog food. There's a lot of executives who are just there to get a check. And you can see it reflected in the practices, the culture, the product line. Like a bunch of products came out and like we're like, how long are you going to re-release Retro J's? To the point. And then of course, then you have the mishap with Ja. I get it. But that piece of advice by what you use was always the dumbest piece of advice I heard. Because if that company doesn't move GDP, then at one point it did. And if you don't see how it's tied into the overall economy, it doesn't matter that you like it or not. Your feelings inside of a company don't matter at all. And most executive leadership don't even care about the consumer. So I think this is one of the greatest declines I've seen in my lifetime for a brand to be so revered to fall. It's almost getting to Blackberry-esque territory in terms of fall off. To see a brand be so beloved, like for those of you who don't know, before the iPhone, the Blackberry was damn near a luxury item, a staple, a status symbol. Jordans were that. People were getting killed over Jordans in the 90s. Now, most kids don't want any Jordan Apparel.

Like I said, at any point, I wouldn't touch it. I hope they get new members to the team to help shape the vision, but the retail sector overall is weak, and most people want luxury items, and that's been the cause of a lot of decay there as well, but I'll send it to you guys.

SPEAKER_2 (4:18)

I think this is a teaching lesson in the statement of investing what you know. I think it's, start with companies that you know, and then you can teach inside those lessons. I just had this conversation a week ago, some of the companies that you know, I don't know any companies, well, let's start with some companies that you know and you probably just subconsciously don't, like sneaker brands, they don't know Nike. Well, is that a good company to invest? So it leads to a deeper conversation, rather than saying, automatically, blindly just invest in what you know, because I could say, what phone are you using if somebody says Apple? Well, let me show you why that could be a great investment. So there's opportunity. It becomes a segue to have a conversation about companies more so than it is to like, this is what you should build your portfolio around. Nike is in trouble. I am a Nike head, and they are in trouble, and I'm just saying that. I'm looking at the numbers here. For the fiscal year, they're down $6 billion. Their operating margin went from 15.6% in 2021 to 8% here in 2026 The price to do business has cost more.