Just Buy It?
Is Nike the sale of the decade or a value trap?
I posted a chart last week with a simple question.
“I didn’t realize this. Is Nike dead?”
The response was unlike almost anything I’ve posted. Strong opinions everywhere. People had a lot to say about Nike. Some defended it. A lot didn’t.
That told me something. When a stock generates that kind of reaction, it’s worth paying attention to.
So let’s dig in.
The Chart That Started It All
That’s not a typo. Nike is down 65.77% over the past five years.
Even over ten years, you’re down 25.71%.
You held one of the most recognizable brands on the planet for a decade and lost money.
Meanwhile the S&P 500 is up over 61% in just the last five years.
That chart is painful to look at. Two lines going in completely opposite directions. Nike has been one of the worst trades you could have made over the past several years.
This week it hit its lowest closing price in 12 years.
It is now in its largest drawdown in over 30 years.
And on April 1st, after reporting earnings, Nike had its single worst day in 40 years. Down 15% in one session. No April Fools joke.
Goldman Sachs, JPMorgan, and Bank of America all downgraded it the same morning. Three of the biggest banks on Wall Street hitting the exit at the same time.
So. Is Nike dead?
Not exactly. But it is very much broken.
What Went Wrong