Shares of Nike fell more than 1 percent on Monday following a tweet from California-based lawyer Michael Avenatti alleging Nike's involvement in a "major high school/college basketball scandal." But the stock recovered after the celebrity attorney was arrested on accusations he had attempted to extort millions from the athletic apparel company.

Avenatti, who represented porn star Stormy Daniels in her lawsuit against President Donald Trump, tweeted that Nike's "criminal conduct" involved the highest levels of Nike and "some of the biggest names in college basketball."

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About 15 minutes after the tweet, Avenatti was arrested in midtown Manhattan for his alleged involvement in a scheme to extort Nike for as much as $25 million. He also faces separate federal charges in a case in Los Angeles where he is accused of wire and bank fraud. In the second case, he allegedly embezzled his own client's money to pay his expenses and debts and used phony tax returns to obtain millions of dollars in loans.

Avenatti's co-conspirator is high profile criminal defense attorney Mark Geragos, people familiar with the matter told NBC News. Geragos is currently defending actor Jussie Smollett, who is being prosecuted by Chicago authorities for faking a racially charged attack on himself. He also represented football player Colin Kapernick in his fight against the National Football League.

"Nike will not be extorted or hide information that is relevant to a government investigation. Nike has been cooperating with the government's investigation into NCAA basketball for over a year. When Nike became aware of this matter, Nike immediately reported it to federal prosecutors. When Mr. Avenatti attempted to extort Nike over this matter, Nike with the assistance of outside counsel at Boies Schiller Flexner, aided the investigation. Nike firmly believes in ethical and fair play, both in business and sports, and will continue to assist the prosecutors," said a spokesperson for Nike.

Nike's stock fell to $80.89, its low for the day, after Avenatti's tweet. The stock, which has a market value of $128.1 billion, has since recovered some of its losses and is trading at about $81.78. Earlier Monday, Nike shares traded as high as $83.22.

The criminal complaint details Avenatti's scheme to threaten economic and reputational harm to Nike if it did not pay him between $15 million and $25 million, and his client, an Amateur Athletic Union coach, $1.5 million. Avenatti said his client had evidence that one or more Nike employees made payments to the families of top high school basketball players.

That complaint added that Avenatti, 48, had threatened to hold a news conference exposing the damaging information on the eve of Nike's earnings release and the NCAA basketball tournament.

Avenatti is due to be presented in Manhattan federal court on Monday.

The athletic apparel company reported a top and bottom line earnings beat on Thursday. Nike shares are up more than 10 percent year to date.