Nike Stock Plummets after Backlash over Colin Kaepernick’s “Just Do It” Ad

Nike Stock Plummets after Backlash over Colin Kaepernick’s “Just Do It” Ad

Nike (NYSE: NKE) shares fell significantly Tuesday after announcing that Colin Kaepernick would be one of the athletes featured in the 30th anniversary of their “Just Do It” campaign. The company’s stock price fell from $82.50 at close on Friday to $79.39 at open Tuesday morning.

Kaepernick – one-time quarterback for the San Francisco 49ers – has been the center of controversy since his refusal to stand for the national anthem during games in 2016 in protest of racism and growing police violence.

While not currently a member of any NFL team, Kaepernick is a role model to many and is one of many athletes Nike has signed for the campaign, including Serena Williams, Lebron James, Lacey Baker, Shaquem Griffin, and Odell Beckham Jr.

The “Just Do It” campaign is celebrating its 30th anniversary and has featured numerous celebrity spokespersons over the decades.

Nike’s stock isn’t the only casualty of the controversy. Social media has been abuzz with those attacking the choice and those speaking up in defense of Nike and Kaepernick.

Kaepernick had a previous deal with Nike, signed in 2011, that was set to expire, but the company renegotiated the terms and kept Kaepernick as one of the faces of their campaign despite criticism from opponents of Kaepernick’s methods.

Kaepernick Tweeted Monday about the endorsement, and it has gone viral.

“Believe in something, even if it means sacrificing everything. #JustDoIt”

The response #NikeBoycott has gone viral as well, and people all over the country are posting pictures of Nike products in various states of destruction. Many have threatened to burn their sneakers and destroy all other Nike products.

The call to boycott Nike products has been loud.

But the defenders’ voices are loud as well.

It remains to be seen how the move will impact long-term sales, but since Nike’s demographic is largely young and urban, the move may not be as divisive as many are predicting.


Coca Cola Buys into Coffee Industry with a $5.1 Billion Deal

Coca Cola Buys into Coffee Industry with a $5.1 Billion Deal

The Coca-Cola Company (NYSE: KO) announced Friday their plan to acquire global coffee brand Costa Limited from parent company Whitbread PLC.

Costa – an English company founded in 1971 – has become one of the fastest-growing coffee chains in the world and is a competitor for Starbucks in the U.K.

The deal is valued at $5.1 billion and would give Coca-Cola a strong coffee platform across Europe, Asia, the Middle East, and Africa.

According to the press release issued by Coca-Cola, “The acquisition will expand the existing Coca-Cola coffee lineup by adding another leading brand and platform. The portfolio already includes the market-leading Georgia brand in Japan, plus coffee products in many other countries.”

With consumer demand for sugary drinks shifting to healthier alternatives, and several states in the U.S. passing legislation limiting access to soft drinks, the move may just be what Coca-Cola needs for long-term survival. While demand for sugary drinks like Coke has decreased in recent years, demand for coffee and gourmet coffee beverages is up worldwide.

The deal gives the Coca-Cola company access to a vast retail chain. Costa currently operates over 4,000 locations, as well as another product for the company to market to restaurants and grocery chains.

Coca-Cola is not the only “junk food” company to make this shift toward healthier products. Pepsi and Nestlé have recently made acquisitions that propelled them into the health food/drink arena as well.

Coca-Cola stock did fall slightly after the press release.


Trump to Sign Order to Reevaluate Retirement Account Rules

Trump to Sign Order to Reevaluate Retirement Account Rules

President Trump signed an executive order Friday which calls for the reevaluation of the rules surrounding individual retirement accounts like 401ks.

The order, which was signed in North Carolina earlier today, is intended to reduce regulatory hurdles, which prevent small businesses from offering competitive retirement packages as well as look into the mandatory age restrictions currently in place.

A press conference announcing the order was held in Charlotte, North Carolina Friday afternoon. Details of the order were also released by several news agencies.

The order will allow small businesses to band together to offer 401k plans to employees and give tax incentives to small businesses who choose to do so, so that the cost of the offering is manageable to employers who would not otherwise be able to offer such incentives.

In an economy where open positions outnumber eligible candidates, this would be a huge boon for small businesses looking to compete with their larger counterparts.

Besides benefiting employees of small businesses, the order also requires that regulatory bodies reevaluate the age restrictions currently in place on retirement plans.

At present, individuals with 401k plans must begin receiving funds from those accounts at age 70½ . The age was determined by IRS life expectancy tables last updated in 2002. Since then the life expectancy has increased from 77 years in 2002 to 78 1/2 years, according to the Federal Reserve Bank.

The executive order asks the Treasury and Labor Department to study the current restrictions and issue new rules with the above issues in mind, as well as an update to the tables.

If the mandatory age increases, retirees will have the option of leaving their funds in place longer, with the potential for the funds to increase over time.

The new rules would benefit Americans with current employer-offered plans, employees of small businesses who aren’t currently offered employer-funded plans, and small businesses who will be able to offer more competitive packages to potential employees.


Robinhood Introduces Global Stocks

Robinhood Introduces Global Stocks

Robinhood has made a name for itself in the investment world by offering free trades on its easy to use app, but until recently, those trades were limited to companies traded on U.S. exchanges. Recently, however, the app has begun offering more and more options.

The company announced Tuesday that they are rolling out ADRs (American Depository Receipts) offering investors the opportunity to invest in over 250 global companies – still with no fees.

For now, the ADRs will be limited to companies trading in Canada, Japan, China, Germany, and the U.K., with French companies to follow in the coming months.

ADRs allow American investors to buy shares in U.S. dollars of stocks traded on foreign exchanges. ADRs are still subject to capital gains and still pay dividends, and the exchange rate is accounted for in the trade.

This expansion by Robinhood, especially on the heels of their opening up cryptocurrency and after-hours trading, should help to keep Robinhood competitive with other brokers. J.P Morgan is set to release their no-fee trading app later this week, and Fidelity recently began offering no-fee index funds.

As new, younger investors become the primary target for brokerage firms, demands for lower fees and better service are driving traditional brokers to change their tactics and opening the playing field ¬- giving new services like Robinhood a chance to enter the game.

The app has grown significantly since its release three years ago, and the creators have made no secret about their plans to take on full-service brokerage firms in the future. Robinhood will have to continue expanding their services if they hope to keep up with the big firms now that they too have started offering no-fee trades.


Teva’s Generic EpiPen Gets FDA Approval and Drives Mylan’s Stock Down

Teva’s Generic EpiPen Gets FDA Approval and Drives Mylan’s Stock Down

The FDA announced Thursday the approval of Teva Pharmaceutical’s (NYSE: TEVA) generic version of the EpiPen and EpiPen Jr. The approval comes after a years-long delay which has contributed to the shortage of EpiPens and the rising costs of Mylan’s (NASDAQ: MYL) brand name EpiPen which has been in the headlines repeatedly in the last year.

The EpiPen is a drug/device combination which allows patients to inject epinephrine directly into their thigh in the event of anaphylaxis.

Mylan’s EpiPens retail for about $600 for a two-pack. Patients must carry two auto-injectors with them at all times. After intense backlash at the rising costs of the drug, Mylan issued an authorized generic in 2016, with a cost of $300 per two-pack.

While there are other brands of epinephrine auto-injectors on the market, like Auvi-Q and Adrenaclick, they aren’t generics. They are brand-name competitors.

“This approval means patients living with severe allergies who require constant access to life-saving epinephrine should have a lower-cost option, as well as another approved product to help protect against potential drug shortages,” said FDA Commissioner Scott Gottlieb, M.D. in Thursday’s press release.

Mylan has made headlines lately with their rising prices and monopoly on the EpiPen’s easy-t-use system which is critical for those with life-threatening allergies. The new generic will mean fewer sales for Mylan and more availability for those who need the life-saving drug.

The approval of a competitive generic couldn’t come at a worse time for Mylan.

The drug company’s stock has been struggling with all the bad press, and the recent supply shortage has compounded the issue. The approval of this generic just made it even worse.

Mylan’s stock dropped 1.3 percent Thursday to $37.31, while Teva’s stock jumped to $23.88, up six percent.


Nvidia Introduces Next-Gen Graphics Chips

Nvidia Introduces Next-Gen Graphics Chips

Nvidia Corporation (NASDAQ: NVDA) unveiled their next-generation Turing graphics chip Monday at the Siggraph conference in Vancouver, and already the analysts are excited.

The new chip boosts performance over six times more than the previous generation Pascal cards – which were already performing at the top of the industry.

The new Turing chips are the eighth generation graphics chip from Nvidia and are a HUGE leap in technology. Jon Peddie, CEO of analyst firm JPR, said in a press release issued by Nvidia, “This is a significant moment in the history of computer graphics. Nvidia is delivering real-time ray tracing five years before we had thought possible.”

With the ever-growing popularity of super-high-end graphic video games, the development of the chip is a game changer for the company, which already dominates the market.

The chips are expected to hit the market in the fourth quarter of this year, but Nvidia’s stock is already seeing a spike as investors anticipate the changes the new chip will mean to the industry.

While the stock price is up since the announcement, it has been volatile, and some analysts are encouraging investors to buy while others recommend waiting until the company releases its earnings report on Thursday.
The stock opened up five dollars Tuesday morning, after the announcement Monday.

Year-to-date, Nvidia’s stock is up almost $100. And with the new chip, which is set to revolutionize the industry, that price stands to climb much higher.

The new chips should bridge the gap between video games and virtual reality, giving gamers an experience that looks and feel much more real. The video game industry has exploded in recent years, with multi-player games like Fortnight and Overwatch creating massive fan bases and bringing in huge revenues.

The emergence of Esports has created an entirely new revenue source for video game and graphics companies. The new more realistic look which will be possible with Nvidia’s new chips will open up even more possibilities for this growing industry.