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

  • Published at 08:48 pm June 21st, 2021
Coca Cola

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

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. 

Also read - Ronaldo snub wipes billions off Coca-Cola’s market value

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. 

Also read - Pogba removes Heineken bottle at Euro news conference

Nevertheless, the BBC have clarified that directly fining the players is not the intention of UEFA (the Union of European Football Associations) and any possible sanctions will be managed by the respective national federation, as Martin Kallen, the CEO of UEFA, states: "We are never fining players directly from the UEFA side, we will do this always through the participating national association and then they could look if they will go further to the player, but we are not going directly for the moment to the player. We have the regulations signed by the participating federations."

As for the opinion of the affected side on the situation, Coca-Cola has made it clear that "everyone is entitled to their drink preferences".

To further support Ronaldo, Ricardo Fort, a sports-sponsorship-consultant who was involved in running Coca-Cola’s partnerships, concluded the media’s judgement of the situation as “clearly wrong”. He went on to say: “The entire market fluctuated yesterday and Ronaldo had absolutely nothing to do with it.” 

Additionally, sports-sponsorship-expert Tim Crow, labelled the outburst as “complete nonsense”, informing the football player that “American investors are not driven by what happens in a press conference ahead of a European football match.” 

Thus, although Ronaldo’s snub may have been uncomfortable for Coca-Cola, it was certainly not the reason behind the company’s financial blow, Fernandes concludes.