By Kevin Kelleher
September 14, 2018

Investors have weighed in on Nike’s ad campaign that features controversial former NFL quarterback Colin Kaepernick. Despite all of the swooshes scissored away by the company’s critics, Nike’s stock closed at a record high on Friday.

Nike shares closed up 2 cents to $83.49, the sixth straight day of closing all-time highs. Nike initially stumbled after the public backlash to the endorsement deal with Kaepernick, but its stock has risen 5% since it announced the marketing partnership.

Kaepernick took a knee while the national anthem played during a football game in 2016, protesting the way some police officers treated African-Americans. Donald Trump has kept the controversy at full boil with his tweets on the subject, calling it an insult to the flag.

Before the endorsement deal, Nike had largely been quiet on the NFL controversy. But the “Just Do It” campaign shows it’s siding with those who kneel.

By some metrics, that move may have tarnished Nike’s brand. A survey this week of 8,000 Americans showed that Nike’s favorability ratings declined in the wake of the Kaepernick announcement. But another metric showed that Nike’s online revenue rose 31% following its endorsement deal with Kaepernick.

Swooshes cut out of socks won’t hurt Nike sales, although the gesture may indicate a willingness by some consumers to avoid Nike products. If anything, however, the overall takeaway from the controversy seems to have been a positive for Nike. The Kaepernick ad campaign not only revives Nike’s classic “Just Do It” motto, but is also inspiring a new generation of consumers to support Nike’s brand.

An analyst at Wedbush estimated that Nike had gained about 170,000 new followers on its Instagram account, mostly among Millennial and Generation Z males. The campaign is engaging those consumers “in a way that is authentic, culturally relevant, experiential and emotionally engaging,” Wedbush said.

On Sept. 20, Nike will hold its annual shareholder meeting, which may create an opportunity for the company’s supporters and critics alike to speak their minds. Five days later, Nike will report its latest quarterly earnings, which will give a clearer indication of whether its Kaepernick campaign has impacted, one way or the other, on its financial health.

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