facebookHow Euro's Top Scorer Cristiano Ronaldo Apparently Wiped Off US$4 Billion in Coca-Cola (NYSE: KO) Stock's Market Value
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How Euro's Top Scorer Cristiano Ronaldo Apparently Wiped Off US$4 Billion in Coca-Cola (NYSE: KO) Stock's Market Value

profileSudhan P

Cristiano Ronaldo created history at the Hungary vs Portugal Euro 2020 match.

The Portuguese became the all-time top scorer at the European Championships after netting two goals in the dying minutes of the Group F opener.

Ronaldo has now scored 11 goals, ahead of France’s Michel Platini on nine.

Other than the record-breaking feat, what Ronaldo did a few days prior captured media attention too.

Source: Screen capture from LIVENow

The Stunt on Coca-Cola

On Monday, Ronaldo was speaking at a press conference ahead of his country’s game against Hungary.

Placed in front of him were two innocent-looking Coca-Cola bottles.

Little did the Coca-Cola bottles know that Ronaldo was already eyeing them as he took his seat.

Source: Screen capture from BeanymanSports’ YouTube channel

After sitting down…

Source: Screen capture from BeanymanSports’ YouTube channel

…Ronaldo went on to pick up the two bottles, removed them from sight, held up his water bottle, and said in Portuguese, “agua”, appearing to encourage people to drink water instead.

Source: Screen capture from BeanymanSports’ YouTube channel

According to news reports, Ronaldo’s move caused Coca Cola’s market value (also known as market capitalisation) to fall by almost US$4 billion.

Market capitalisation refers to a company’s share price multiplied by its total number of outstanding shares.

Coca-Cola’s shares were priced at US$56.10 apiece before the press conference but that dropped by 1.6% to S$55.20 right after.
 Coca-Cola share price Market capitalisation
(based on 4.31 billion shares outstanding)
Before press conference US$56.10US$241.79 billion
After press conference S$55.20US$237.91 billion
Difference in market capitalisation N/AUS$3.88 billion

Market Value Decline ≠ Earnings Decline

But of course, we won’t know for sure if Ronaldo was indeed the one who caused the fall in Coca-Cola share price, even if the media has cited the correlation.

You see, stocks bob up and down on a daily basis for a variety of reasons, some that can be totally unrelated to the company.

Also, a decline in Coca-Cola’s market value due to Ronaldo’s snub doesn’t mean that its future net profit will be affected, as that’s a function of Coca-Cola’s product sales (or revenue), operating expenses and so on.

Ronaldo is an influential figure, but he’s unlikely to have that much influence over Coca-Cola’s business in the long run.

Therefore, if you are an investor of Coca-Cola, you shouldn’t worry about this incident.

As Coca-Cola, one of the official sponsors of the tournament replied on Tuesday with a statement saying, “everyone is entitled to their drink preferences” with different “tastes and needs”.

Well played.

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Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any stock. The writer may have a vested interest in the companies mentioned. Artwork image credit: Google Finance

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About Sudhan P
It isn't fair competition when only one company in the world makes Monopoly. But I love investing in monopolies. Before joining the Seedly hood, I had the chance to co-author a Singapore-themed investment book – "Invest Lah! The Average Joe's Guide To Investing" – and work at The Motley Fool Singapore as an analyst.
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