Apple chief Tim Cook bought shares worth about $3 million in Nike, a move that nearly doubled his personal stake in the sportswear maker and signaled confidence in the turnaround strategy laid out by CEO Elliott Hill.
Shares of the company surged 5% on Wednesday after a regulatory filing showed that Cook, who has been on Nike’s board since 2005, bought 50,000 shares at $58.97 each.
As of Dec. 22, he held about 105,000 shares, according to the filing released on Tuesday.
It was the largest open market stock purchase for a Nike director or executive and possibly the largest in more than a decade, said Jonathan Komp, analyst at Baird Equity Research.
“(We see) Cook’s move as a positive signal for the progress under CEO Elliott Hill and Nike’s “Win Now” actions,” Komp said.
The purchase comes days after Nike reported weaker quarterly margins and weak sales in China even as CEO Hill tries to revive demand through fresh marketing plans and innovation focused on running and sports, while phasing out lagging lifestyle brands.
He has also attempted to mend Nike’s ties with wholesalers such as Dicks Sporting Goods to increase visibility among shoppers amid stiff competition from newer brands.
However, the strategy has strained Nike’s margins, which have been declining for over a year, while its efforts to win back its premier position in discount-friendly China appears to be faltering.
Nike’s shares have slumped nearly 13% since it reported results on Dec. 18 and are on track for the fourth straight year of declines. They were trading at $60.19 on Wednesday.
Cook has been a lead independent director of Nike since 2016 when co-founder Phil Knight stepped down as its chairman.
The Apple CEO “remains extremely close” with Knight, Komp said, adding that he has advised Nike through key strategic decisions including Hill’s appointment last year.
Board director and former Intel CEO Robert Swan also bought about 8,700 shares for about $500,000 this week.
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