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After Cristiano Ronaldo's gesture, the truth about the fall in Coca Cola shares

2021-06-20T07:41:38.939Z

The footballer despised the soda in front of the cameras and the company suffered a millionaire drop in its price. Did you lose money? A market analyst explains it.



06/16/2021 8:13 PM

  • Clarín.com

  • sports

Updated 06/16/2021 8:13 PM

"Cristiano Ronaldo made Coca Cola lose billions of dollars

.

"

Words more, words less, that headline copied the portals, television screens and navigated through social networks around the world, after on Monday the Portuguese star set aside two bottles of that soda before starting his press conference, in a clear gesture of contempt for the drink and shortly after a fall in the stock price of the American company was registered. But was the stock price drop really a consequence of the player's attitude? According to experts, that is hardly a possibility.

"Finding the exact explanation for this decline is not an easy task. No one could say with absolute certainty that the fall in the value of the shares was caused by what Ronaldo did. But it could have been that way," he commented in a talk with Clarín

Mauro Cognetta

, partner and CEO at

Big River SA

.

When the stock market opened on Monday, Coca Cola shares were worth about $ 56.10.

Half an hour later, after the whole world saw Ronaldo's gesture, they began to slide, reaching a low of $ 55.22.

And in economic terms, the company went from being worth $ 242 billion to $ 238 billion. 

"The financial market operates a lot by algorithms, which work with logical reasoning, they tell you

'If this happens do such a thing'

. There may be programmed computers that look for fast news, whether positive or negative, and operate accordingly. They say

' This is positive, I buy; this is negative, I sell

.

'

And if some of those computers came across the Ronaldo news, which is ultimately bad news for the company, perhaps they executed sell orders and generated that drop, "he explained Cognetta.

What are the other possible reasons?

On the one hand, the fluctuation of the market itself.

"It is normal that one day the shares rise and the next they fall, what matters is the underlying trend. And if you see a trend in Coca Cola stocks, it goes up," said Cognetta.

"In addition, that 1.6 percent drop that was registered is not a 'brutal' fall as I read in some media. A strong, abrupt decline would be 3 percent or more."

Other experts assured that the price loss occurred because on Monday -the same day as Ronaldo's conference-, Coca Cola paid its quarterly dividends, that is, as every three months ago, it distributed a proportion of its profits among its shareholders. . 

"When a company pays dividends, the stock falls in the same proportion. If it was paid on Monday, the decline could have been because of that," Cognetta said.

And he pointed out the importance of correctly explaining what this loss in the price of its shares means for the company.

"Many say that Coca Cola lost money, millions of dollars,

but it is not correct to say that

. In reality, what it lost is

market capitalization

, that is, the value of the company went down. A company like Coca Cola has an amount x of shares and if you multiply that figure by the value of each share, it gives you the value of the company. If the value of the share goes down, logically the value of the company also goes down. But it is something that usually happens every day, "he clarified. the Economist.

Will Ronaldo's gesture and decline impact long-term shares in the company?

Based on Cognetta's reading, most likely not.

Perhaps there is a drop in the consumption of soda, if there are those who decide to imitate the Juventus star and the Portuguese team and opt for a healthier diet; But if the company continues to generate profits and consolidate its presence worldwide, this curious episode starring Cristiano - who at least gave him publicity and a presence on the networks - should not cost him dearly. 

Source: clarin

All news articles on 2021-06-20

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