Nike shares hit as Kaepernick ad spurs boycott

Eli Harold, Colin Kaepernick and Eric Reid of the San Francisco 49ers kneel on the sideline during the anthem prior to a game against the Dallas Cowboys in 2016. (AFP)
Updated 04 September 2018

Nike shares hit as Kaepernick ad spurs boycott

  • Calls for a boycott of Nike gained traction on social media following its choice of Colin Kaepernick as a face for the 30th anniversary of its Just Do It slogan
  • Over 30,000 people were tweeting with the hashtag #NikeBoycott on Tuesday morning US eastern time, making it among the top trending topics on Twitter

NEW YORK: Shares of Nike Inc. fell 3 percent on Tuesday as calls for a boycott of the sportswear giant gained traction on social media following its choice of Colin Kaepernick as a face for the 30th anniversary of its “Just Do It” slogan.
Former San Francisco quarterback Kaepernick, the first NFL player to kneel during the national anthem as a protest against racism, posted a black-and-white close-up of himself on Instagram on Monday featuring the Nike logo and “Just do it” slogan, along with the quote: “Believe in something. Even if it means sacrificing everything.”
Over 30,000 people were tweeting with the hashtag #NikeBoycott on Tuesday morning US eastern time, making it among the top trending topics on Twitter. Some posted images of themselves burning and ripping their Nike shoes and apparel.
“First the @NFL forces me to choose between my favorite sport and my country. I chose country,” Twitter user @sclancy79 said in a post retweeted 16,000 times. “Then @Nike forces me to choose between my favorite shoes and my country. Since when did the American Flag and the National Anthem become offensive?,“
Still, there were a large number of other users who took positively to Nike taking a stand on social issues.
Athletes including LeBron James and Kevin Durant showed support, posting images of Kaepernick’s ad on their Instagram profiles.
Even former Iranian President Mahmoud Ahmadinejad weighed in, tweeting: “The #NFL season will start this week, unfortunately once again @Kaepernick7 is not on a NFL roster. Even though he is one of the best Quarterbacks in the league.”
Retail industry analysts were divided on whether the heat around the campaign would be a commercial positive for Nike or ultimately alienate and lose customers.
“The alt-right calls for a Nike boycott will fail just like the boycott of Dick’s Sporting Goods failed,” said Matt Powell, a senior adviser with market research firm NPD Group. “Old angry white guys are not a core demographic for Nike.”
Gun rights supporters called for the boycott of Dick’s Sporting Goods earlier this year after the retailer stopped selling assault rifles and high-capacity magazines following a massacre at a Florida high school in February.
Another analyst, GlobalData Retail’s Neil Saunders, said the campaign will harm Nike in middle America, where it is battle Germany’s Adidas for dominance in the sneaker market.
“The company’s stand may go down well on its native West Coast; it will be far less welcome in many other locations,” he said.
US President Donald Trump has been critical of athletes taking a knee during the national anthem and has said he would love to see NFL owners fire football players who disrespect the American flag.
Nike, who confirmed on Monday that Kaepernick was part of the campaign and called him “one of the inspirational athletes of his generation,” did not immediately respond to requests for comment on Tuesday.


AirAsia shares fall after auditor flags ‘going concern’ doubts

Updated 38 min 9 sec ago

AirAsia shares fall after auditor flags ‘going concern’ doubts

  • The Malaysian company posted a loss for the first quarter of this year that was its biggest since its 2004 listing

KUALA LUMPUR: Shares in Malaysia’s AirAsia Group tumbled 11 percent on Wednesday after its auditor said there were material uncertainties that cast doubt on the budget carrier’s ability to continue as a going concern.

Ernst & Young (EY) issued an audit opinion stating that the airline’s 2019 earnings were prepared on a going concern basis, which is dependent upon a recovery from the COVID-19 pandemic and the success of fundraising efforts.

In response, the airline said in a statement that Malaysia’s stock exchange had granted it 12 months relief from being classified as a financially distressed firm — a classification that would
require it to submit a business improvement plan.

Malaysia has also extended the relief to other companies which have been hit by the pandemic.

“EY is waving a red flag, which signals to investors and creditors serious risks to AirAsia if the current crisis doesn’t end soon or if the airline doesn’t get a cash injection,” said Shukor Yusof, head of aviation consultancy Endau Analytics.

Like airlines around the world, AirAsia has been hit hard as the coronavirus hammers travel demand. It posted a first-quarter loss of 803 million ringgit ($188 million), its biggest loss for the quarter since its 2004 listing.

The company said last month it was evaluating capital-raising proposals to strengthen its equity base and liquidity.

AirAsia management has given guidance that an equity raising via a placement or rights issue looks imminent, Affin Hwang Capital analyst Isaac Chow wrote in a note to clients on Tuesday.

AirAsia did not comment on its fundraising efforts.

The airline’s liabilities exceeded its assets by 1.84 billion ringgit at the end of 2019, EY said in its unqualified opinion — which indicates the auditor believes a company has prepared its statements fairly.

AirAsia said on Monday that joint ventures and collaborations were being deliberated which might result in additional third-party investments in specific segments of the group’s business.

It has also sought payment deferrals from suppliers and lenders and halted all deliveries of Airbus SE jets this year as it seeks to cut costs.

“There’s a question mark over the viability of the low cost carrier business model post-COVID19,” said Yusof. 

He said that AirAsia had little choice but to shrink its fleet size and slash staff and noting that its efforts to expand in India and Japan had not been successful.

AirAsia’s shares are down 55 percent this year, giving it a market capitalization of around $594 million. Shares in its long-haul arm, AirAsia X Bhd were also hit on Wednesday, falling 5 percent.

Elsewhere in the region, Thai Airways International and Virgin Australia Holdings have entered bankruptcy protection due to their inability to pay creditors.