Nike’s Performance Slips Further — Apple CEO Steps In With a Big Buy

Apple (Apple) CEO Tim Cook (Tim Cook) has stepped in to support Nike (Nike) by making a sizeable personal investment following a sharp sell-off in the stock. On Monday (Dec 23), Cook spent nearly US$3 million to purchase shares of the sportswear giant after its disappointing earnings release weighed heavily on the share price.

According to a filing released by the U.S. Securities and Exchange Commission (U.S. Securities and Exchange Commission) on Tuesday (Dec 24), Cook bought 50,000 Nike shares at an average price of US$58.97 per share, bringing the total transaction value to approximately US$2.95 million. His total holdings in Nike now exceed 105,000 shares.

Cook currently serves as Nike’s lead independent director and has been a board member since 2005. His decision to significantly increase his stake amid market weakness is widely seen as a vote of confidence in Nike’s long-term prospects.

Mixed financial outlook

Nike shares closed up 0.2% at US$57.34 on Dec 23. However, the stock plunged more than 10% the day after the company reported weaker-than-expected results on Dec 18. Year to date, Nike shares are down about 25% and remain below levels seen a decade ago, underscoring the challenges facing the company’s growth recovery.

Financially, Nike’s performance has been mixed. Sales in Greater China have declined sharply, and the company expects revenue to contract in the current quarter. Over the past three years, Nike’s revenue growth has averaged a modest 2.4%, while operating margins have slipped to 6.54%, continuing a downward trend over the past five years. Net margins have also narrowed to 5.43%, highlighting ongoing pressure on profitability.