Monday, November 18, 2019
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Avenatti’s Sensational Allegations On Nike Send The Stock Tumbling

Avenatti's Sensational Allegations On Nike Send The Stock Tumbling

Nike is undoubtedly one of the biggest sports brand globally with a market value of close to $128 billion. However, after a tweet made by Michael Avenatti, a famous lawyer based in California, the shares of Nike fell by 1 percent. His allegation included a huge scandal that the top officials of Nike were involved in with the respect to high school/ college basketball. The downfall was short-lived though and the stock recovered within a day after the attorney was arrested on charges of planned extortion from the number one sports apparel brand.

Avenatti, most famous for representing Storming Daniels, a famous actor in the porn industry against President Donald Trump, revealed that the “criminal conduct” of Nike involved the biggest names in basketball and was intended to malign the reputation of the sport. He even said that his client held valuable evidence that would be able to prove that Nike paid quite a few players taking part in school/college basketball. Within 15 minutes of making the tweet though, he was arrested in his Manhattan residence on charges of attempting extortion from Nike in return for the information of an amount ranging from $15 to $25 million.

There are other federal charges pending against Mr. Avenatti as well, accusing him of bamboozling his client and using their money for covering his expenses and clearing his debts. The co-conspirator, in this case, is Mark Gregoras, a famous criminal defense lawyer, who is currently working on the Jussie Smollett case where he stands accused of faking racial allegations.

A spokesperson from Nike said that the company was assisting an investigation that was being handled by the government regarding the NCAA basketball for almost a year and will continue to do so. However, when they came to know about the allegations of Avenatti, they took prompt actions. The ethics of Nike strongly applies to fair play in business as well as sports. Right after the tweet, the shares fell to $80.89. It recovered soon to $81.78 and opened on Monday at $83.22, showing that it has dealt with the problem effectively.

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