Trump Slams Nike's Kaepernick Deal After Shares Slide

Nike, Inc.'s NKE shares retreated 3.2% on Tuesday after a gutsy, political move betting on quarterback Colin Kaepernick in its latest high-profile advertisement deal.

At the 30th anniversary of iconic Just Do It Campaign, the deal could involve "millions of dollars per year" and include branded apparel, according to Yahoo NFL reporter Charles Robinson.

On Tuesday, President Donald Trump, who was weighed in on the NFL controversy and handling of the protest, criticized the company's decision in an interview with the Daily Caller published after the market close.

"I think it's a terrible message," he said on Tuesday. "Nike is a tenant of mine. They pay a lot of rent."

#NikeBoycott was trending on Twitter in response to the campaign and shares declined 3.2% as of market close. Institutions told Real Money that outraged investors have led a call to divest from the company despite their advisement against it.

"We had a handful of requests to sell [Nike]," Dennis Fagan, founder and partner at Fagan Associates, a financial advisor based in Troy, New York told Real Money. He noted that the volume of calls to trade the stock was abnormally high as the outspoken campaign roused investor ire.

Why the controversy?

The former San Francisco 49ers quarterback is famous for sparking a national conversation about race over the last couple of years after refusing to stand during the national anthem out of protest over treatment of African Americans and minorities in the United States.

"I am not going to stand up to show pride in a flag for a country that oppresses black people and people of color," Kaepernick told NFL Media back in 2016. "To me, this is bigger than football and it would be selfish on my part to look the other way. There are bodies in the street and people getting paid leave and getting away with murder."

While the deal has received support from fellow athletes and fans, Nike's choice of Kaepernick to represent their trademark "Just Do It" campaign was not taken positively by some shareholders and activists on social media, as #NikeBoycott has taken off on Twitter. Many self-declared shareholders are declaring their bitter break with the sporting goods company on the platform, with some even going as far as to burn Nike items in protest.

To be sure, it's not clear how much the politically tinged move will impact the stock overall, as Nike currently sponsors and manufactures equipment for all 32 NFL teams, meaning NFL fans will be helping Nike with their purchases, no matter what quarterback they support.

Further, the slide in early market trading only slightly dampens the stock's strong year, as it has risen over 20% since the start of the second quarter for calendar year 2018.

Analysts and larger scale investors expressed their confidence in the ability of the company to rebound in interviews with Real Money during the trading day today.

Real Money contributor and former long-time NYSE floor trader Stephen Guilfoyle is also holding out hope for the stock's ability to grow, setting aside the political for the potentially profitable.

"This is a policy matter between employer and employee," he wrote this morning. "My concerns on this are only about the stock's performance, and my feelings on that are purely mercenary in nature."

While he remained cautious on the stock's pricing in relation to its earnings, he explained that the company's historically strong September performance numbers bode well for short term trades heading toward the company's September 25 earnings presentation.

As the earnings day approaches, analysts and shareholders will be vigilant in their analysis of whether controversy sells jerseys or the stock.