Nike Shares Rise on Ackman’s Return

August 15, 2024 10:59 AM PDT | By Invezz

Nike Shares Rise on Ackman’s Return — Image source: Invezz

Nike Gains 4% on Ackman’s Return

Nike Inc. (NYSE:NKE) saw its shares rise nearly 4% on Thursday, driven by investor optimism following the return of billionaire investor William Ackman as a stakeholder. Ackman’s hedge fund, Pershing Square Capital Management, now holds approximately 3 million Nike shares, representing a stake of about 0.19%, according to a filing made on Wednesday. Although Ackman has not yet disclosed any specific plans for this investment, his involvement is seen as a potential catalyst for a turnaround at Nike.

Ackman is expected to have a significant influence on Nike’s executive team, potentially helping to address recent strategy missteps and intensifying competition. Brian Mulberry, a client portfolio manager at Zacks Investment Management, which held $25.79 million worth of Nike shares as of June, noted that Ackman’s presence could help steer Nike back on track.

Challenges and Potential for Change

Nike’s stock has declined nearly 30% this year, and the company has forecast a drop in annual sales for fiscal 2025. This performance has led to speculation about a possible management shake-up, including the potential departure of CEO John Donahoe. Art Hogan, chief market strategist at B Riley Wealth, commented that activist investors often aim to replace top executives, referencing recent industry moves such as Starbucks’ hiring of Chipotle CEO Brian Niccol to rejuvenate growth.

Ackman’s previous involvement with Nike in late 2017, during a period when Nike was losing market share to Adidas, ended in 2018 with a profitable exit. His return is seen as a strategic move that might prompt further changes at Nike.

Analysts and investors suggest that it might be early for Ackman’s influence to be fully felt, and he may need to acquire a larger stake to drive significant impact. Currently, Nike’s forward price-to-earnings ratio for the next 12 months stands at 24.26, compared to Adidas’ 36.75, indicating room for strategic adjustments.

Featured Image: Unsplash

Please See Disclaimer

About the author:
I am a writer and an editor with experience in publishing, research, and SEO strategies. I have an honors BSc in Social Work from the University of Benin, Nigeria.

The post Nike Shares Rise on Ackman’s Return appeared first on Invezz

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations, and video (Content) is a service of Kalkine Media LLC., having Delaware File No. 4697309 (“Kalkine Media, we or us”) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.