Nike Suffers Worst Stock Drop in 23 Years

The world's leading sports brand lost $23 billion of its market value in one day, and its shares fell by 19% last Friday. Over the previous 12 months, they had already dropped by 17%, marking their worst decline since 2001.

According to Bloomberg, several reasons account for this significant drop in numbers. The main reasons include Nike being forced to prioritize wholesale partners and sports due to the growth of other brands competing in the retail market. Additionally, the brand is seeking to find a successful replacement for its best-selling shoes, the Air Force 1 and the Dunk.

Some analysts attribute many of the problems to the "inexperience and lack of instinct" of CEO John Donahoe and his team, who have been in charge since 2020, compared to previous top executives. This has left Nike in a "push" model, where the brand has to convince consumers to buy its products rather than people fighting to get them, according to Sam Poser of Williams Trading.

In the world of football and sports marketing, this raises the question: Can Nike afford the new multimillion-dollar contract with the German federation? It should be noted that the DFB announced a few months ago that starting in 2027, it will end its more than 70-year relationship with Adidas to switch to the competition, as Nike offered to pay 100 million euros annually in sponsorship, almost double what the German brand offered.