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Nike Drops Golf Equipment: Here's How You Can Take Advantage

NKE, MODG, ADDYY

The top dog in sports equipment and apparel is throwing in the towel on golf equipment. In a surprise move, Nike Inc (NYSE: NKE) announced on Wednesday that it will no longer be producing golf clubs, balls and bags.

“We’re committed to being the undisputed leader in golf footwear and apparel,” Nike President Trevor Edwards said in a statement.

Rival golf equipment maker Callaway Golf Co (NYSE: ELY) is surging 7.6 percent on the news that one of its largest competitors will be out of the market.

Related Link: Why The Seahawks Are The Google Of The NFL: 'They Let You Be You'

Calloway shareholders have been looking for some much-needed good news about the golf business, which has suffered in recent years from declining interest.

Nike’s golf division saw its revenue decline 8.2 percent in the past year, the worst performance of any Nike division.

For traders that believe a golf comeback is in the works, Callaway is now the best pure-play golf stock.

Nike’s golf business was built around star athlete Tiger Woods, whose dominance of the game in the late 1990s and early 2000s created a new generation of golf enthusiasts. Woods’ highly-publicized downfall in 2009 left a large void in the game.

Nike is apparently not the only company looking to downsize or eliminate its golf business. Rival adidas AG (ADR) (OTC: ADDYY) is reportedly seeking buyers for its golf business as well.

Nike’s stock opened Thursday’s session up 0.4 percent.

Disclosure: the author holds no position in the stocks mentioned.



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