Nike will be taken private and run multiple activist plays by the end of the year. Jawboning about channel problems has hidden the brand’s widow maker. They have a demand problem. 

+ How I killed 90 min/day of team bottleneck w/ an AI expert I built in an afternoon

After analyzing where I spend my time I realized the greatest thing holding Coco AI back was me. I spent 90 mins/day in Slack answering questions and going back and forth with the team.

For a 5 person Org that’s too much. So I had Claude Cowork solve my problem.

Last week I rolled out Sage. Essentially the Jarvis of CocoAI. The most valuable thing I’ll build all year.

Sage ingests:

Then the team talks to a chatbot to answer their questions.

They can ask it anything and it answers in real time.

When it can't answer, it pings me. I reply in thread which Sage creates a wiki. 

It’s an infinite learning loop where to train the team on.

What’s next?

We start plugging Sage into the rest of the business:

It’s just a Slack bot I built in Claude Cowork over 5-10 hours last week. Completely custom to our biz. Training the team and getting me out of the way.

Note: As always, none of what follows is legal, tax, investing, financial, or any other sort of advice. And I was never here 😉.

Nike (the iconic shoe biz that turned niche sports into cultural phenomenoms) is torching the most valuable brand in sports history.

The stock is in free fall while literally everyone else in the category is growing. On Running +32%. Adidas +11%. New Balance +15%. HOKA +16%. 

This biz is too important to the consumer economy for us to watch it burn.

Link to Nike FY2025 10-K -- SEC EDGAR

Competitive Benchmarking (Most Recent Fiscal Year, GAAP)

On/Deckers at ⅓ of the market cap on 10-20x lower Revenues is insane but also tells you everything you need to know about how bad Nike screwed the pooch here.

This is still Nike’s game to lose.

DTC and Wholesale are both down. We can stop with the BS narrative that they have a channel problem. People have stopped buying Nike.

AF1, Dunk, AJ1 all -50% online in a single quarter. Jordan Brand down double digits for the year. Nike oversaturated three of the greatest franchises in sneaker history. Everyone else swooped in and is carving up the empire.

Founded:

Aha Moment:

Growth:

Model:

Where We Are Now:

Here are the 3 ways we turn Nike from the clearance rack back into a religion.

Nike is running a $55B cost structure on a $46B biz. It’s a simple math problem wrapped up in a brand crisis

OPEX staying flat at $15B while revenue fell $5B.

Here’s the basic plan:

Just like all the tech stocks this biz is still has so much COVID bloated. 

There are areas of deep cuts:

And Right size cuts:

You just don’t need as many people when Rev is falling off a cliff with no signs of that trend reversing.

Nike needs to admit they aren’t a trendy fast growing brand anymore but the legacy incumbent.

Takeaway: Right size to the biz Nike is today. Not 3 years ago.

The most frustrating part is they have all the pieces and are WHIFFING this execution.

Nike has already signed her to an 8-year $28M deal w/ her own shoe deal.

They have the opportunity to recreate the best partnership in the biz’s history with a truly generational talent in a market they are struggling in.

And they couldn’t be swinging and missing harder.

The Clark Nike ad: 500K YouTube views.

FIRE their ad agency. What is this Bush league garbage? THE woman who alone she drives 26% of all WNBA economic activity has <500k VIEWS!?!?!

I get the State Farm “from the logo ad 10x a day. 

If Insurance & Gatorade can figure out how to monetize her likeness. HOW TF can Nike not figure this out. SHE WEARS THEIR PRODUCT ON HER BODY!!!!

It is so glaringly obvious she’s the Michael Jordan of the WNBA and her star is on the rise and they can recreate the magic that made “Nike” Nike with her.

In Year 1 the Jordan shoe sold $126m. Forget her shoe where’s her entire brand dedicated? Nike literally built this playbook and it was OBVIOUS Clark was going to be this good.

I’m picking on this because it is painfully the most obvious but you can use this example with Wemby and probably 10 other athletes. It’s just so bad.

No but seriously what is this absolute garbage of an ad. This has 17m but from the quality of this ad that has to be 95% paid.

Takeaway: Fire their agency and whoever is responsible for dropping her shoe.

The Jordan Brand alone: does $6-7B in Rev and latest estimates say if Nike spun them out they’d be worth $20-25B. ~30% of Nike's entire market cap sitting inside a brand languishing under the same bad decisions as the rest of the org.

Just like how Amazon needs to spin out AWS, and Google needs to spin out Youtube.

It’s time to set Jordan free.

It needs its own dedicated leadership. Competing independantly in the marketplace.

Just like how Louis Vuitton makes Christian Dior and Givenchy better (all LVMH houses) from "Independent Competition” Nike needs to have Jordan in the marketplace by itself.

Nike will still hold the majority position, but get Jordan back in an active role with a stock refresh, its own CEO, its own creative direction.

It’s too big to be just a product line in a dying brand.

Then run the same play again. And Again. And Again.

Nike is the incubation hub taking bets on the best class of athletes as they become generational talent.

Then spin the actual generational talent brands into its own biz. Repeat until this is a $1T empire.

COUGH COUGH Caitlin Clark is the OBVIOUS move here. But why don’t:

All have their own brands.

I bet Federer wouldn’t have invested so much in On (or would have even been able to) if Nike had built the Federer brand for him.

Now they wish they did that a decade ago since On’s a $20B biz now and chasing them as the Nike Killer. 

Takeaway: Nike is an athlete brand incubator biz. Not a sneaker biz.

Nike will get torched before the current CEO can right the ship, because he’s playing the wrong game.

He’s going to spend his entire tenure unwinding a terrible decision to turn Nike into a Tech biz, previous CEOs fault.

I’m not saying he’s doing the wrong things, but he won’t have enough time to turn that big of a ship as hard as they need before On & Hoka catch up to them.

And the smart money is pricing this reality already.

While the current CEO spends the next 24 months “Getting Nike back to the brand”, On and Hoka will soak up all the cool factor that Nike will continue to bleed moving dead inventory through discount channels.

Unless you make radical changes like cutting 25% of the workforce, spinning out your best brand or betting the farm on a 24 yr old WNBA star the cultural wins won’t come fast enough.

On is worth $20B on $2B in Rev, and Hoka is worth $22B on $4B. Both gaps to Nike are considerable, but they should be WAYYY bigger.

Neither of those bizs are worth that much money.

But investors are convinced they’ll eat Nike’s market share. Today $20B sounds cheap if either biz can hit $40B in Rev in 5-10 years unseating Nike.

Nike needs aggressive leadership with big bold moves. Which is nearly impossible for a 60 yr old 77k person org.