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Comment by rf15 | Hacker News Reader

Beyond the stock market gambling aspect, what actually happened here?

> revenue down 2%

That means almost nothing, right? Some fluctuation must be expected. The Stock also looks like it really benefited from a Corona boost that is now cooling off.

Can someone with more insight explain why everyone is screaming?

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    > Beyond the stock market gambling aspect

First, the United States' stock markets (NYSE + NASDAQ) are not gambling. An index-tracking portfolio has never lost money over a 20 year time frame for the last 125 years.

Google tells me:

    > Nike Annual Revenue Breakdown
    > Fiscal Year 2026: $46.40 billion (+0.19% YoY)
    > Fiscal Year 2025: $46.31 billion (-9.84% YoY)
    > Fiscal Year 2024: $51.36 billion (+0.28% YoY)

Many Wall Street analysts will tell you that a stock price is the value of its future earnings growth. Nike has had three terrible years. As a result, their stock is in the toilet.

The price of any individual stock though is mostly determined by hype. Revenue and concrete performance plays a part but hype is very much a driving factor and hype is fickle.

Well tbh, hype does tell you something about future demand. It doesn't guarantee sales, but how excited people are about a product gives you an idea of how likely they are to buy it.

I think Nike lost some of its cool while the competition got better. For me, the turning point was walking into a Nike store and thinking their prices were way too high for what I was actually getting.

I reckon they'd be in a much worse position without Jordan. It's still a massive part of their appeal, even if its sales have slowed too.

And the stock market doesn't just look at today's revenue and performance. It also prices in what people expect to happen next. If people think a brand is losing its appeal, they won't necessarily wait for that to fully show up in the numbers.

    > And the stock market doesn't just look at today's revenue and performance. It also prices in what people expect to happen next.

Yes, I addressed this directly in my post. "Many Wall Street analysts will tell you that a stock price is the value of its future earnings growth."

This is the naive short term way to think of a stock price. I assure you fund managers, hedge funds etc do not. And I'm sure you can reply with an anecdote, but that doesn't prove the rule of 'any stock'.

Wall Street analysts would call "hype" as "investor sentiment". Equity stock prices have a portion of them that cannot be explained by models. Another way this appears: the price-earnings ratio. There are no good models that can accurately explain nor predict the P/E ratio for a single stock.

No one is screaming. Nike’s market cap is just being right-sized to reflect the lack of moat in the clothing/shoe business. Personally, Nike’s $54B vs Adidas’ $28B is still too high.

From what I understand, their moat was the exclusive contract with Michael Jordan - it was a novel marketing at the time. I guess the novelty eventually wore off and other basketballers are not as skilled at selling shoes as Jordan.

I know this does not really contribute to the discussion and I have nothing against you or what you've said, but man am I sick of reading the word moat in this context.

May I ask why?

https://en.wikipedia.org/wiki/Economic_moat

It seems like a very appropriate term that quickly conveys its meaning if your business is presumed to be the castle you want to protect.

Without knowing any of the specifics of nike, investors are chasing money losing AI with promises of 100000x growth in the next five minutes, not a manufacturer of physical products that perhaps actually make a profit every year.

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