Four charts that prove Under Armour CEO Kevin Plank has no idea what he's talking about
Kevin Plank is a successful businessman with strong opinions. The data, though, suggests he places ideology above facts.
Under Armour CEO Kevin Plank
If you’re a huge sports merchandise brand, you never want your marquee superstar endorser going after you in the press. But that’s what happened this week when Under Armour CEO Kevin Plank told CNBC that “[t]o have such a pro-business president is something that is a real asset for the country.”
The aforementioned marquee superstar, 2014-15 NBA champion and reigning MVP Steph Curry of the Golden State Warriors, took a shot:
“I agree with that description, if you remove the ‘et.'”
The two have now apparently gotten on the same page after some top-speed backpedaling by Plank, who has taken great pains to clarify that he only meant his praise in a strictly business sense. It’s fun when CEOs get hauled out to the woodshed.
The problem is that even the business-specific comment illustrates what a fact-resistant barking fucktrumpet Plank is. History shows pretty conclusively that business does better under Democratic administrations. Donald himself said so in 2004:
“I’ve been around for a long time and it just seems that the economy does better under the Democrats than the Republicans.”
You’d think a big-time CEO could read a chart, but apparently Plank can’t. For instance, how about this one, which shows Under Armour’s stock performance from the time Barack Obama was inaugurated up until Q4 of 2015.
That’s a climb from around $5 to roughly $100 per share.
Of course, then this happened:
I did some snooping and it looks like growth was slowing down, which scared investors, and a recent Quartz analysis suggested that the company needs to understand how much its success hinges on design and style – something it has heretofore not understood.
I then turned to my colleague Otherwise, who knows a great deal more than I do about business. His initial reaction: “my guess would be the stock was overvalued in the first place. Trendy stock, bunch of amateurs in Peoria buy it, like Amazon and Google bubbles.” After a little more study, he came back with this: “Quick read, the assholes put in place an ownership structure which effectively changed their governance so that our boy Kevin can do whatever in the fuck he wants. Pro investors really, really don’t like that.”
Otherwise hasn’t studied the case in depth and this isn’t my area of expertise at all, so who knows. Doesn’t really matter, anyway. The important part is that first chart, which shows UA, dramatically overburdened by a socialist president who just hates business, quintupling their stock price.
After that? Well, here’s the Dow Jones performance vs. Under Armour over the same period. The Dow is the blue line and UAA is the green.
Let’s look at one more chart. This the Down (blue) and Under Armour (green) since Donald’s inauguration.
I know this is an awfully small sample and I don’t want to draw any conclusions on limited data, but, you know, just saying. The evidence we have suggests that absolutely, Plank could benefit from a business-friendly president.
Maybe the better question, though, is whether Under Armour could benefit from a better CEO.
lullaby pit 
It’s debatable whether a great CEO can influence a stock’s price upwards (at least in the short term,) but there’s no doubt a fool can tank it. Fun piece.
This is all well and good, but you’re aggressively sidestepping the point. Per CNBC: “During the eight years of President Obama, the Dow jumped 150 percent, or 12.3 percent annually, through Tuesday, according to Bespoke Investment Group. That’s the third-best stock market performance since WWII for any president behind only President Clinton’s and FDR’s triples.”
During this time – at least, up until they drove off a cliff in late 2015 – UAA was performing remarkably well. Growing like gangbusters. So obviously they were doing something right.
From this data, an objective observer would have a hard time painting Obama as somebody who was hating on business. Plank, though, celebrates the fact that FINALLY we have a pro-biz president.
He isn’t the only guy out there who’s placing ideology above facts, of course. My point clearly isn’t that the company didn’t accomplish what it accomplished – I mean, I’m the one providing that first chart. My point is about a man making a patently stupid comment. He ought to know better.
Frank–valid points, sorta, but big drop in 2015 wasn’t a split, it was a governance issue. And I thought all you right wingers were efficient market guys. If you believe in market efficiency, then Merton, Fama and Miller say that the stock price should incorporate all historical data (including profit and loss) as well as future expectations. So the drop in stock price reflects the wisdom of crowds about the future P&L. (And you know full well that P&L is only one of three important statements, and one increasingly being criticized by professional investors for its limitations.) I could go on, but the line between “good for business and therefore good for society” and “good for business at the expense of society” is not a clear one. As a good Univ of Chicago guy, I believe the former to a point, but don’t take it as immutable Randian truth like Republicans do. As you say though, time will tell, although I’d think Trump’s hypocrisy(“drain the swamp” and the DeVos scandal, repair Obamacare vs. repeal, one China, etc, etc) would be starting to worry you a bit. Trump will be a good test of many things–words vs. actions, ideology vs. competence, and ability of those on the right to learn from experience. (We never had dinner when I was in CO last year. Will be in Leadville for summer)
Steph Curry with the dad joke of the year. Thanks for the post.
I’m sure by now you understand that a point can’t always be made in 150 characters. I cannot imagine for a second that there was anything remotely ambiguous about my point for those who read it all, and I know you did. But to restate, Plank isn’t an idiot because he hasn’t made money. He’s an idiot because he felt it necessary to suggest that Obama was bad for business. Ideology trumps facts.
If he believes Trump would be better for biz than Clinton – an assumption I’m going to need proven to me, but that’s what he thinks, so fine – then that’s what he should say. What he DID was simply indefensible according to the data.
I’m not a finance guy, so could you explain your comment about “Judging by UA’s 2016 performance it is paying off” for me? This is the chart for 1-1-16 to present and while I know stock price isn’t the only metric, this doesn’t tell an especially encouraging tale.
Okay, but I’m not seeing anything causal in here, or systemic. Not sure I see how that’s Obama’s fault, nor do I get how it explains your comment about UAA performance.
I generally hate the fuck out of UA because of his work to get Maryland out of the ACC – hardly the best reason, but there it is – but I always try to account for the basic well being of employees. If they tank, it puts good people on the street and I’m always against that.
I still think my point holds – there’s no data suggesting that FINALLY we have a good pres for biz makes sense, and I’ll be eager to see if Trump is as good as you think he’ll be for the economy or if he’ll be the dumpster fire I suspect. This is a case where, as bad as I hate the bastard, it would be good if I were wrong.
Well, I didn’t really call you a fucking idiot. If I thought you were a fucking idiot I wouldn’t argue with you. There are many people who had logical reasons to vote for Trump that aren’t stupid, it’s just those reasons are unsavory. Far more common are people who think they have logical reasons when in fact they made an unseemly emotional decision and have sub-consciously constructed a logical facade that helps them sleep knowing they’re risking the republic.
The argument that you feel business will be better is fine and is your right. It’s your argument that’s shaky, both the bad financial analysis (Sam’s wasn’t much better, btw) and using your business as a proof point.
Your business suffered because the price of oil fell precipitously. If your business does better, than means the price of foreign oil is up, which is indeed good for you but historically has been bad for every-non-oilfield business in America, although it’s less true than it used to be. It’s certainly not valid to make inferences about the overall American business climate based on the performance of a single, small US oilfield services company. Personally, I’d love for the price of oil to go up–my son and brother work in the oilfield and as an ecologist, I’m just fine with $110/bbl oil.
You do indeed play by the rules and that’s why I respect you enough to engage. Your right to your opinion is unimpeachable, but like most Trump supporters, the logic for how you got there is downright patchy. Having said that, you may be right, no one can ever predict markets.
Don’t remember that. At any rate, “tried?” No one ever accused me of trying to bite someone’s head off. My skills have eroded.
I won’t offer a defense, but I will say this has been a frustrating election for me. My candidate won by 3 million votes and didn’t get in, and now I’m having to put up with muscle-bound morons screaming at me that I’m “liberal trash.” So I’m not the calm, Zen-like figure I normally am.
I know that mine well. At least from the vantage point of riding a bicycle past it a few times.
btw, the drop in stock price is ok because it was because of an acquisition? that’s even worse. it means the acquisition in question was 100% dilutive, in other words Plank gave away half the capital in his company. and “take a short term hit in market price while he consolidates control….” he consolidated control by changing the rules. the right way to consolidate control is to own a majority of the stock. he rigged it so he has control without ownership–as a business owner, you think that’s a good thing? Sheesh.