Nike shares jump as Ackman's return sparks turnaround hopes
By Ananya Mariam Rajesh
Aug 15 (Reuters) -Nike shares NKE.N gained nearly 4% onThursday as investors hoped the return of billionaire WilliamAckman as a stakeholder could spark a turnaround at thesportswear giant that has beenbattling with strategymissteps and tough competition.
Ackman's hedge fund Pershing Square Capital Management nowowns roughly 3 million shares of Nike, amounting to a stake of about 0.19%, a filing showed on Wednesday. He has not revealed any plans for the investment yet.
"He's going to have the ear of the executives at Nike and be able to lend some influence on maybe how to get the ship righted, as it were, for Nike at this point in time to try and find their way back home," said Brian Mulberry, client portfolio manager at Zacks Investment Management, which owned $25.79 million worth ofNike shares as of June.
Thestock has lost nearly a third of its value this year and the company has forecast a drop in annual sales for fiscal 2025, leading some Wall Street analysts and investors to raise the possibility of a management shake-up including CEO John Donahoe.
When an activist investor comes in, the ultimate goal "willbe replacing the person that sits in the corneroffice," said Art Hogan, chief market strategist at B Riley Wealth.
"And I say that because the template for that has been very clear this week in the form of Starbucks."
Starbucks SBUX.O poached Chipotle CEO Brian Niccol earlier this week, tapping the industry veteran behind the burrito chain's turnaround to revitalize growth at its coffee outlets.
Niccol joining Chipotle in 2018 was also the result of one of Ackman's pressure campaigns that have often led to CEO changes at companies including J.C. Penney and Air Products and Chemicals.
Ackman last invested in Nike in late 2017,around the time when the company was losingmarket share in North America to a reinvigorated Adidas.
Heexited Nike a few months later in 2018, makingroughly $100 million in profit by cashing out of the 0.71% stake - a rarepassive investment for the billionaire investor.
Analystsand investors hinted on Thursday it might be early days for Ackman's second stint as an investor at Nike and he will need to build a largerstake to make an impact.
Nike's forward price-to-earnings ratio for the next 12 months, a common benchmark for valuing stocks, was 24.26, compared with Adidas'36.75.
Reporting by Aishwarya Venugopal, Ananya Mariam Rajesh and Granth Vanaik in Bengaluru; Editing by Devika Syamnath
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.
