The NBA star caused Under Armour stocks to drop 3% after saying kids don’t like to play basketball in the company’s shoes.
When celebrities talk, shareholders listen.
This week, NBA star Kevin Durant dissed Under Armour athletic shoes in a podcast, and shares of Under Armour Inc (UAA) spiraled more than 3% the next day. “Nobody wants to play in Under Armours. I’m Sorry. The top kids don’t because they all play Nike,” said Durant, who has an endorsement deal with Nike, during an interview on “The Ringer,” a podcast hosted by Bill Simmons.
Of course, it’s more common for celebs — often with a financial incentive to do so — to say kind words about a brand, which helps its bottom line. One of the most prominent examples being Oprah Winfrey: Since buying shares in Weight Watchers International (WTW) in 2015, Winfrey stands to make eight times her original investment of $43.20 million. The stock has quadrupled this year and has shot up 510% since she took a 10% stake in the company and said three little words that gave dieters hope, “I. Love. Bread.” Why were those words so powerful? The media maven managed to shed 40 pounds using the program.
Indeed, according to a 2012 study conducted by Harvard Business School’s Anita Elberse for the Journal of Advertising Research, entering into an endorsement increases a firm’s valuation.
But Brad Walsh, vice president at JonesTrading tells Moneyish, “Celebrity association can help and hurt – it’s a double-edged sword.”
And that means Durant isn’t alone in hurting a company’s stock. Here are four more times
celebrities have managed to move the needle on a stock:
Kendall Jenner, Pepsi
Last spring, Kendall Jenner became the official face of Pepsi and a well-intentioned ad backfired. In the two-and-a-half minute commercial, the reality star is seen attending a protest where she hands a soda to a police officer. It might sound benign, but within 48 hours of being released, 1.6 million people had viewed the ad on YouTube and it garnered significant negative attention due to its distasteful protest imagery. While during the scandal, PepsiCo, Inc’s (PEP) stock surged, after Jenner and the carbonated beverage giant issued an apology, prices plummeted 12%.
Read more: https://moneyish.com/ish/5-times-a-celebrity-like-kevin-durant-has-downed-a-companys-stock/