Nike Faces Dow Exit as Share Price Continues to Slump
Nike's spot in the Dow Jones Industrial Average is under threat due to its falling share price. The sportswear giant has struggled with slowing sales and competition from upstarts over the past five years, leading to an 80% slump in its market value.
As a result, Nike will be removed from the S&P 100 before trading begins on September 21, as part of a quarterly rebalancing. The company has been a part of this index for 18 years.
Analysts attribute Nike's removal to its small market value and share price, which is currently around $36. This makes it the smallest factor in the price-weighted Dow index, a position that has typically preceded other index removals.
Josh Bischoff, partner and head trader at TimesSquare Capital Management, said 'Just looking at it historically, it probably is a candidate for removal.' He noted that Nike currently holds the smallest weight among the Dow's 30 components, at 0.4%.