On September 18, Kylian Mbappé ended a Nike partnership that started when he was a child and signed a 10-year deal with On, the Swiss running-shoe brand. Three days later, on September 21, Nike was removed from the S&P 100 after almost 18 years. The Nike S&P 100 exit got the bigger headlines. But these are not two stories. They are one.
Start with the index. The S&P 100 is a list of 100 of the biggest companies inside the S&P 500. Every three months, S&P Dow Jones Indices checks who still fits and swaps out the ones that don’t. Nike’s total stock market value fell from about $264 billion in November 2021 to about $57 billion. That is too small for the club. Its seat went to Dell, Palo Alto Networks, Arista Networks and SanDisk — all companies riding the data center boom. Nike stays in the S&P 500.
Funds that copy the S&P 100 had to sell their Nike shares. That selling is automatic, like a rule in a game. But it did not cause Nike’s fall. The fall came first. The index just did its paperwork.
So where did around $200 billion go? Go back to 2020. Stores were closed, and shoppers poured into Nike.com. Then-CEO John Donahoe made a big bet: people would keep buying online and from Nike’s own stores. This is called DTC, or direct-to-consumer — the brand sells to you itself, with no shop in the middle. Nike cut back on many wholesale partners, the sporting goods chains and sneaker shops that sell lots of brands.
Then shoppers went back to those shops. Many people still want to try a shoe on before they buy it. The shelf space Nike left empty did not stay empty. On and Hoka were two of the fastest-growing brands that filled it.
This is where Mbappé comes back in. On started in Zurich in 2010 with one running shoe. Its second-quarter sales this year were about CHF 850 million, up 13.5%. Now it is using that money to enter soccer. Its first boots come in 2027, and former France star Thierry Henry runs the project. Mbappé’s deal includes both cash and shares, so he becomes a part-owner — the same kind of deal Roger Federer made with On in 2019. The brand that grew on Nike’s old shelf space is now hiring Nike’s most famous young face.
Nike is trying to fix this. Elliott Hill, a Nike veteran, took over as CEO in October 2024 and is rebuilding ties with stores. Wholesale sales are growing again while Nike’s own direct sales shrink. The next earnings report is on September 29.
One more thing people notice after the Nike S&P 100 news: the dividend. Nike pays $1.64 a year per share. With the stock near a 12-year low, that works out to a yield of around 4% — high for Nike. But a yield goes up when the price goes down. It is not a gift. It is the same drop, seen from another side. Nike has a long history of turning its brand into money in creative ways, but this time the market is doing the math for it.
My take: The index didn’t push Nike down. It just wrote down where Nike already was.
Not advice. Just how I see it.