Adidas Shares Tank After Company Warns It May Lose Over $1 Billion After Dropping Kanye West
A shoe company is paying the price after cutting ties with extremist hip-hop artist Kanye West.
Shares of Adidas tanked after the company's CEO admitted that merchandise linked to the Nazi-loving rapper could impose a big cost, according to CNBC.
Adidas terminated its merchandise partnership with West in response to a series of anti-Semitic and pro-Nazi statements from the artist last year.
The company admitted that it expected to lose money in 2023 in a Thursday announcement that sent its stock price plummeting.
The question of merchandise connected with West under the "Yeezy" trademark is fueling its losses.
Adidas stands to lose about $1.3 billion if the company is unable to sell its existing West-linked stock, according to CNBC.
The company is still actively assessing what to do with its inventory of products linked to West.
Adidas anticipated a profit loss of more than $500 million if it proves unable to liquidate West-branded shoes, according to the BBC.
Adidas’ breakup with Ye, formerly known as Kanye West, is a pricey one. The company warned Thursday that it’s expected to lose $1.3 billion in revenue this year because it’s unable to sell the designer’s Yeezy clothing and shoes. https://t.co/8p5fE2ZcY5 pic.twitter.com/nROPNqLb9a
— WSVN 7 News (@wsvn) February 10, 2023
West disclosed that he anticipated losing $1 billion from Adidas' termination of its partnership with him last year -- losses that the company appears poised to match in turn.
The rapper formerly known as Kanye West told the world last year that he lost $1 billion after severing a partnership with Adidas. Now it turns out Adidas stands to lose even more. https://t.co/nPui2Z1hNp
— WJZ | CBS Baltimore (@wjz) February 10, 2023
The company had originally planned to sell its stocks of West-linked inventory without reference to West himself, a plan that hasn't materialized, according to TMZ.
Adidas' shares declined in price by more than 12 percent on Friday after the corporate report, according to The New York Times.
Adidas shares fell as much as 11% after the company disclosed that their 2023 revenue may drop by ~$1.3 billion due to unsold Yeezy inventory
Adidas' "worst-case scenario" for 2023 is an operating loss of ~$750 million pic.twitter.com/PfCCpDK3td
— Kurrco (@Kurrco) February 10, 2023
“The numbers speak for themselves. We are currently not performing the way we should,” Adidas CEO Bjørn Gulden said in a statement.
West is facing other problems pertaining to his music and entertainment career.
A former business manager claimed he had been unable to find West to serve a court summons in December, delaying a lawsuit over what he says is a breached contract.
This article appeared originally on The Western Journal.
