Betsy Ross American Flag On Sneakers Puts Nike In Trouble

Betsy Ross American Flag On Sneakers Puts Nike In Trouble
July 3, 2019

 

NIKE, Inc. shares (NYSE: NKE) dropped 0.60% to finish at $84.96 yesterday after a sneaker featuring the early 18th century “Betsy Ross” variant of the American flag was withdrawn by the apparel and footwear manufacturer on the basis of a protest made by former NFL player Colin Kaepernick. The withdrawal triggered retaliation from Arizona Governor Doug Ducey who ordered the cancellation of financial incentives promised to the company for establishing a factory in that state.

Nike decided to withdraw the Air Max 1 Quick Strike sneakers following an objection made by former NFL football player Colin Kaepernick, who highlighted the flag’s use during an era of slavery. The image of the shoe provided by Sneakernews.com includes a version of the US flag with 13 stars forming a circular pattern and 13 stripes. As per Smithsonian, the US was using that version of the flag between 1777 and 1795. There are also reports that the flag is used by hardline groups. The company had planned to introduce the shoe in the market for $140.

Kaepernick became a controversial figure in sports after refraining from standing for the national anthem during a 2016 “NFL preseason football game,” in a revolt against racial inequality.

Since that season in 2016, Kaepernick has not played a game. His petition against the league has been settled. Last year Nike featured Kaepernick for the 30th-anniversary celebration of its “Just Do It” campaign.

Regarding the withdrawal of Air Max 1 Quickstrike, Nike issued the following statement to CNN Business: “Nike has chosen not to release the Air Max 1 Quick Strike Fourth of July as it featured an old version of the American flag.”

This is not the first time Nike has withdrawn a product due to objections. In China, the company removed some products from shelves after support by a fashion designer for Hong Kong protests resulted in a social media backfire. At that time, Nike justified its action by saying that the decision was taken “based on feedback from Chinese consumers.”

In May, following an objection made by an indigenous group in Panama, Nike aborted the launch of a version of Air Force 1 sneaker.

However, the withdrawal didn’t go well this time. Ducey, Arizona’s governor since 2015, quashed the incentives promised to the company for establishing a factory on metro Phoenix’s west side. The factory was anticipated to create 500 jobs in the area, the Arizona Republic stated on Monday. On Monday, the Goodyear City Council had accepted to waive a maximum of $1 million in processing and permit fees and payback up to $1 million for the employment opportunities it creates.

Regarding Nike’s withdrawal, Arizona Governor Doug Ducey, a Republican and ex-CEO of Cold Stone Creamery, tweeted as follows: “It is a shameful retreat for the company. American businesses should be proud of our country’s history, not abandoning it. Nike has made its decision, and now we’re making ours. I’ve ordered the Arizona Commerce Authority to withdraw all financial incentive dollars under their discretion that the State was providing for the company to locate here.”

The market is expected to have a bearish view of the stock due to withdrawals of incentives for opening a factory in Arizona.

The historical price chart indicates that the stock is facing resistance at 85. Furthermore, the MACD indicator is making negative divergence with the stock. As a result, we can anticipate the stock to remain weak in the short-term.

nke - technical analysis - 3rd July 2019

Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.

Ian Maguire

Ian Maguire

Ian is our resident contributor to the latest going ons in the cryptomarket, keeping up to date with the latest icos and coins


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