Through out the history of capital
markets there has always been natural competition. There are monopolies, but for the most part
Pepsi competes with Coke, Phillip Morris competes with British Tobacco,
AT&T competes with Verizon. One
company in particular has been a monopoly for quite some time. Recently, Under Armour has emerged and taken
on Nike.
Does UA have what it takes to take
on the retail King of the World? A
couple months ago UA’s stock split 2 for 1.
It was trading upwards of 1$12.
It saw heavy resistance at those levels and management probably felt
that the stock price was getting too high and started to price investors out at
over $110. It split to around $55, got a
little above $60 (120 split adjusted) and has since fallen to $47.
Nike, just like Under Armour, was
trading upwards of $114. This week Nike
split 2 for 1 and raised their dividend (UA does not pay a dividend). Nike also probably felt that the stock price
was getting too high and wanted investors to be able to buy at a lower
price. Now the major question is would
you buy Nike at $50 or UA at $47? Did
Nike purposely split so that their stock price would be around the same as UA?
Companies come and go, but we all
know Nike is here to stay. Does UA have
what it takes to take on this world-renowned behemoth? The Nike Swoosh is one of the top recognizable
symbols in the world along with the McDonald’s arches and the colorful Google
logo. Will UA continue to thrive or hit
a wall and crash like so many companies have in the past? Only time will tell.
No comments:
Post a Comment