You guessed it; I am talking about Nike.
I not wish to get into any discussion or judgment about my heading, but I am interested firstly in the impact on share price from specific business decisions and secondly, I am in awe of audacious marketing.
Old school marketers would not survive in the very sharp analytics of modern day marketing with sophisticated algorithms used to test marketing strategies.
The Nike decision was totally calculated.
Of course, they knew that some clients would go out and burn their Nike bra or long-distance runners.
They also knew their decisions and the burning at the stake would bring them hundreds of millions of free advertising.
And it did.
Nike knew this daring risk would maybe not please some customers, but they knew it would be a kicker for their shareholders who at the end of the day couldn’t give a tinker’s curse about who burns what.
So, let’s look at Nike share price action:
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Nike (NKE:NYSE) - Daily Line Chart
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Nike (NKE:NYSE) - Weekly Line Chart
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Nike (NKE:NYSE) - Monthly Line Chart
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You can see from the daily chart that the only impact on the share price was, yes, to give it a new momentum.
The weekly suggests a pullback.
The monthly suggests a top could be nigh.
Well, nigh in a monthly sense as it takes time for monthly targets to be reached. But in this case maybe a high over the coming 18 months or so.
You can’t help but notice the exponential meteoric price rise over the last ten years – an eight-fold increase.
Impressive by any standard.
I don’t own a Nike item but obviously many love the brand.
Now all the above begs the question as to whether Nike’s share price was going to keep hurtling along despite the controversy.
Possibly.
I am more likely to believe the technical story than the subjective media, company spruiking.
The price will rise when buyers deem so. And will fall when buyers change their mind and become sellers and deem that it is time to look for another Nike.
Enjoy the ride
Tom Scollon
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