Bill Ackman’s investment firm buys $229M worth of stock in the ailing apparel brand. He last held company stock in 2017.
Prominent hedge fund manager and online culture warrior Bill Ackman is Nike’s latest investor.
Last week, the billionaire’s Pershing Square investment firm disclosed a purchase of 3 million shares worth $229 million in the apparel and footwear giant. Ackman last held Nike stock in 2017, when he sold his stake for $100 million in profit.
Headquartered on a 400-acre campus in Beaverton, Nike employs 75,000 worldwide (10,000 in Oregon) and is the state’s largest corporation. But the brand is ailing amid increased competition from On, Hoka and others, a decline in sales and a worsening foreign exchange rate, especially in China.
Nike’s stock sank heavily in June following a reported 26% year-to-date sales drop. In the weeks after, the company laid off more than 700 people in Oregon as part of a plan to save $2 billion. For fiscal year 2024, it reported sales of $51.4, which is flat from 2023. It’s the slowest growth by the company since 2010, excluding the COVID pandemic. The company is projecting a further sales decline in 2025.
CEO John Donahoe has faced criticism for pulling the brand out of retail establishments to focus on direct-to-consumer sales while stepping back on innovation and design, according to reporting by the Portland Business Journal.
Nike’s stock jumped 5% at news of Pershing’s purchase.
Ackman has 1.4 million followers on the social media platform X, formerly Twitter, where he’s outspoken on issues including the Ukraine War, U.S. policy in the Middle East and the COVID-19 pandemic. He came to nationwide attention earlier this year when he publicly pushed for the ouster of former Harvard University president Claudine Gay amid a plagiarism scandal. For years a donor to Democratic candidates and causes, Ackman made further waves in July when he endorsed Republican candidate for president Donald Trump.
Ackman is Pershing’s manager and principal investor. In the second quarter of 2024, the firm’s portfolio consisted of $10 billion concentrated in only nine stocks. Nike is now its smallest holding; Hilton Hotels is the largest with 8.9 million shares.
Ackman has a history of pushing for changes big and small at companies where he invests. But analysts say his activism might be less effective at Nike, where the board is dominated by one man, company founder Phil Knight.
On the same day he bought Nike stock, Ackman purchased 6.9 million shares of investment management firm Brookfield Corporation while cutting his positions with Chipotle, Google parent company Alphabet, Hilton Hotels and Canadian Pacific Railway.
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