Nike announced layoffs and weak revenue guidance. The stock dropped. Retail traders who bought shares based on inspirational commercials about overcoming adversity are now learning that Phil Knight doesn't give a f*ck about their Robinhood portfolio.
The company reported falling revenue for a second day of declines. Turns out selling $200 sneakers made by robots becomes harder when people realize they can buy the same shoe from a different company for $60. Revolutionary insight from the C-suite.
Nike's plan involves cutting staff to improve margins. Wall Street calls this "operational efficiency." The people getting fired call it "getting fired." Same thing, different tax bracket.
Technical analysis shows support at the 50-day moving average intersecting with the "holy sh*t I should have bought puts" trendline. The RSI indicates oversold conditions, which in plain English means the chart went down and some guy with a YouTube channel thinks it might go back up. Maybe it will. Maybe it won't. The chart has no f*cking idea either.
Somewhere right now a day trader is explaining to his wife that Nike is a generational buying opportunity because the Swoosh logo represents bullish momentum in Eastern chart philosophy. His wife is explaining to a divorce attorney that her husband trades options based on corporate logos.
The stock dropped for two consecutive days, which retail traders are calling a "bear market" and "the end times." Professional traders are calling it "Tuesday and Wednesday." Nike will either fire enough people to make the numbers work or it won't. The revenue will either recover or it won't. The stock will either go up or down or sideways.
None of this matters because Nike's price movement has nothing to do with sneaker sales and everything to do with which algorithm decided to dump shares first. But sure, read another earnings analysis. That'll help.
Photo by Paul Steuber on Unsplash
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