Wednesday, 28 July 2021

Ronaldo had nothing to do with Coca Cola’s $4bn drop in share price

Photographer: Ramin Talaie/Bloomberg via Getty Images

NEW YORK – During a pre-match conference, prior to Portugal’s Euro 2020 football championship opener, the team’s forward Christiano Ronaldo set aside two Coca-Cola bottles that lay on his table, while cheekily gesturing to the reporters to drink water. 

Aware of the athletic megastar’s status and influence on social media, Ronaldo’s carefree motion was expected to pave some implications for the US multinational’s value and demand. 

Unfortunately, “some” was an understatement. Moments after the player’s interview, numerous articles on the incident, from various media outlets, had spread, declaring that Ronaldo’s disfavour of the carbonated drink had drained the company of $4 billion.

With a range of contrasting commentary on CR7’s action, from articles depicting the matter in a negative light, to some praising Ronaldo for his healthy influence on society, as well as the use of the scene in the production of memes and parodies, the truth was distorted, according to a Forbes article. 

But when in doubt, looking at the unfaltering facts can always help, says Nuno Fernandes, a professor at IESE Business School, who wrote the article. 

On June 11, Coca-cola closed with 4.3 billion shares with a share price of $56.16 for $242 billion. Three days later at 9:40am EST, just 10 minutes after it reopened for business, its stock prices had dipped by 1.6%, to $55.26, with a market value of $238 billion — $4 billion dollars less than what it was previously. 

Interestingly, Christian Ronaldo’s incident with the coca-cola bottles took place at 9:43am EST, three minutes after the share price drop. 

Clearly, other external factors, which had no relation to the sports-celebrity, contributed to the downfall of Coca-cola’s market value, which many media sources failed to take into account.

For instance, on June 14, Coca-cola shares became ex-dividend; since the dividend had already been issued, share prices had automatically adjusted to a smaller value as a result of stocks coming to a halt in order to perform the dividend rights — naturally, the ex-dividend date coincided with that of Ronaldo’s conference call. 

On the other hand, contrary to what most believe, Ronaldo’s contact with the bottles actually led to a rise in Coca-Cola’s share price by $0.30, promoting the company’s value by an extra $1.3 billion. 

In spite of the player’s innocuous actions, the Euro 2020 teams could be fined if drinks provided by tournament sponsors are disregarded by their players, during public conferences. 

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