Here’s Why Nike (NKE) Changed Its Strategy

Bronte Capital, an investment management company, released its “Amalthea Fund” fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. The fund lost -2.12% in December, -0.97% for the quarter, and gained 15.60% for the calendar year. Compared to that, the MSCI ACWI index had gains of 1.28%, 4.63%, and 21.92% (in $A) during those periods, thanks to its global diversity. This quarter, and particularly in December, the market has been actively hostile to the fund’s strategy due to a generalized squeeze in high-short-interest names. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Amalthea Fund featured stocks like NIKE, Inc. (NYSE:NKE) in the fourth quarter 2023 investor letter. Headquartered in Beaverton, Oregon, NIKE, Inc. (NYSE:NKE) designs, develops, and markets athletic footwear, apparel, equipment, and accessories. On March 4, 2024, NIKE, Inc. (NYSE:NKE) stock closed at $99.54 per share. One-month return of NIKE, Inc. (NYSE:NKE) was -2.99%, and its shares lost 16.77% of their value over the last 52 weeks. NIKE, Inc. (NYSE:NKE) has a market capitalization of $154.361 billion.

Amalthea Fund stated the following regarding NIKE, Inc. (NYSE:NKE) in its fourth quarter 2023 investor letter:

“NIKE, Inc. (NYSE:NKE) of change of strategy: Fast forward a few years and Nike has had a change of strategy that was an Exocet to shoe industry retailers. Nike (who do not sell on Amazon) decided (accurately) that they had the hot product and wanted to drive sales through their own (mostly online) channels. They wanted to capture the retail margin.

Nike used to have 30,000 wholesale arrangements (retailers who sold their product). They cut this number sharply, down to 3000 and told people they were going to 1800. Small shoe retailers lost their core brand. Many failed…” (Click here to read the full text)

March Marcho / Shutterstock.com

NIKE, Inc. (NYSE:NKE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, NIKE, Inc. (NYSE:NKE) was held by 69 hedge fund portfolios, same as 69 in the previous quarter, according to our database.

We discussed NIKE, Inc. (NYSE:NKE) in another article and shared the list of best environmental dividend stocks to invest in according to analysts. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.