Nike is set to be removed from the S&P 100 index, marking the end of its nearly 18-year presence in the blue-chip index. S&P Dow Jones Indices announced the move, with the change taking effect before the market opens on September 21. This departure follows a significant decline in the company's market value, which has fallen by more than $200 billion from its peak.
Company's Market Value Decline
Nike reached a market valuation of approximately $281 billion in November 2021. However, as of Tuesday, the company's stock closed at $38.10, resulting in a market capitalization of roughly $56.5 billion. This represents a decrease of about 79% from its intraday record high of $179.10 on November 5, 2021. Over $220 billion in market value has disappeared since that peak.
While the exclusion from the S&P 100 is not expected to impact Nike's day-to-day operations or its ability to sell products and sign athletes, it signifies a loss of its status as a premier blue-chip company. The company's market value is now approximately one-fifth of what it was five years ago.
Political Engagements and Consumer Backlash
Nike's recent financial performance and market standing have been linked to its embrace of progressive political stances. The company's decade-long engagement with left-wing political themes has been cited as a factor in alienating segments of its customer base. This strategy has drawn comparisons to Michael Jordan's famous 1990 quote, "Republicans buy sneakers, too," which underscored the importance of appealing to a broad political spectrum for business success.
Instances cited include Nike's 2018 "Just Do It" campaign featuring Colin Kaepernick, who protested during the national anthem to raise awareness about racial injustice. The company also faced backlash in China in 2021 after expressing concerns about reports of forced labor in Xinjiang. During an earnings call that year, then-CEO John Donahoe stated, "We’re a brand of China and for China," emphasizing the company's commitment to the Chinese market despite domestic criticism.
In 2019, Nike withdrew a Fourth of July-themed sneaker featuring the Betsy Ross flag, citing concerns about potential offense. The following year, the company launched a racial-justice campaign and publicly supported Black Lives Matter messaging. In 2023, Nike partnered with Dylan Mulvaney for a promotion of women's apparel, and faced reports of supporting a study involving transgender youth athletes, though a Nike executive later stated the study was not moving forward.
Business Performance in China
Nike's strategy in China has also seen a downturn. In 2021, the company generated $8.29 billion in revenue from Greater China. This figure has since decreased to $5.85 billion, representing a nearly 30% drop, including an 11% decline in the past year.
These events collectively contribute to Nike's current market position and its removal from the S&P 100. The company's executives are reportedly focused on rebuilding product innovation and marketplace relationships that were foundational to its past dominance.