Why Nike Stock Just Crashed
Shares of sportswear giant Nike (NYSE: NKE) took a hit in Thursday morning trading, falling 4.7% through 11:30 a.m. EDT, after Chinese state media seemed to encourage consumers to boycott foreign brands that have, in the past, criticized its use of forced labor by Muslim Uyghurs in the country's Xinjiang region.
Online, this sparked a series of criticism of companies ranging from Hennes & Mauritz to adidas to Nike, all of which have at one time or another stated that they do not source their products or raw materials from Xinjiang. All three companies are part of the "Better Cotton Initiative" trade group, which Reuters describes as promoting "sustainable cotton production" and says has avoided buying cotton from Xinjiang, "citing human rights concerns."
Chinese consumers have posted online comments such as, "if you boycott Xinjiang cotton, we'll boycott you." The Communist Youth League accused Nike and its peers of wanting "to make money in China while spreading false rumors and boycotting Xinjiang cotton." The People's Liberation Army called the companies "ignorant and arrogant," and China's Foreign Ministry accused the companies of spreading "malicious lies."
Source Fool.com
