On September 3, 2018, Nike announced that Colin Kaepernick would be the face of their 30th edition “Just Do It” advertisement campaign. Shortly after, on September 5, 2018, Nike’s advertisement featuring Kaepernick was released to the public. The transpiring of these events took society by storm: headlines emerged, social media exploded, and NKE (ticker symbol) stock prices dropped then spiked. In this thesis, I attempt to explain, from a psychology perspective, the short-term economic reaction to Nike's ad following the announcement of Kaepernick as the centerpiece the campaign.
Utilizing the event study methodology, I find that NKE stock experienced a significant drop in abnormal returns on September 4, 2018 (first open stock market day post Kaepernick announcement). Additionally, I illustrate the rebound of NKE stock in the days/weeks following that initial drop using descriptive analysis of NKE daily stock closing prices. Finally, I discuss several online surveys whose findings shine light on the geographically specific spikes in Nike online sales post announcement. Finally, I use the psychologicy theories of loss aversion, mere exposure effect, and in-group bias to make sense of this unique economical story.