$NKE - ✅
Nike - Part 3 and final -
Shabbat Shalom friends!
We hope you stretched and recovered well from the first and second rounds...
Because just before Shabbat, we are taking advantage of the pleasant weather and returning with our Nike, skipping to round number 3 and final!
So make sure your shoelaces are tied!
On your marks... get set... go!
Today we will skip to the following stations:
At station number 1, we will meet those who are not fazed by current challenges and are betting big on Nike.
At station number 2, senior management members at Nike will be waiting for us.
At station number 3, we will stop to refresh at the computer station and try to understand: what is hidden in the chart (?)
We're off!
At the first station, we meet none other than super investor Bill Ackman, who is taking advantage of the recent declines in Nike stock and making a significant purchase.
Bill Ackman rolls up his sleeves and buys 16,280,338 Nike shares at a price of $88.4, for a sum of $1.5 billion!
With this purchase, Ackman gave Nike a share of over 11% in his portfolio.
Is his involvement in Nike's active management now the reason for this?
In short, Bill Ackman is an activist investor who interferes in the management of the companies he invests in. The moment he invests in Nike, he interferes in Nike's management.
Many things are said about Ackman on Wall Street, but the most prominent among them is: "Ackman does not like to lose money."
So why is Ackman buying Nike? Ackman is happy to buy stocks when he believes they are on sale. He advocates holding them until their prices reflect what he believes are their true values.
Ackman is known for betting big on distressed brands.
For example, Ackman jumped on Chipotle ($CMG) shares 9 years ago when the company faced one of the crises in its business history, and with the help of a new CEO, it overcame it. Eventually the stock surged afterwards and became one of the largest positions in his portfolio.
Trying to apply the same principle at Nike?
Ackman also supported bringing in the new CEO here, whom we discussed in parts 1 and 2.
Is Ackman right about Nike?
Related or unrelated to Ackman's activist investment -
The American investment management firm "Artisan Partners" mentions Nike in its letter to investors: "Nike's innovation pipeline and reorganization efforts could unlock significant upside potential for investors." (attached)
And not just Ackman, in fact, 66% of Nike shares are held by institutional investors and hedge funds.
Let's skip to the second station -
At the second station, the board members are waiting for us -
The first - Bob Swan
Bob Swan, former Intel CEO who serves as a board member at Nike.
About a year ago, Bob bought Nike shares for $1.2 million at a price of $96 per share, and he doesn't stop there.
About half a year ago, Bob bought Nike shares again, this time for $250,000 and at a price of $77.
Another Nike board member joins Bob - John Rogers
Rogers is a prominent American investor and a senior board member at Nike who a few weeks ago bought Nike shares for about $200,000 and at a price of $76.5.
All purchases were made with their personal funds.
As Nike board members, Bob and Rogers are an active part of the decision-making processes and the recovery processes led by the new CEO.
Do their purchases constitute a vote of confidence in the company's recovery efforts led by the new CEO?
Let's skip to the third station!
At the third station - the chart - what does the technical analysis show?
Technically, Nike stock appears to conform to the technical definition of a "double bottom" - a double bottom - as it can be observed that the stock was halted twice and supported at the $70 area. (marked on the chart)