Cristiano Ronaldo was preparing for a pre-match news conference ahead of Portugal's Euro 2020 football championship opening. Two minutes before the match began, the Juventus superstar striker set aside the two Coca-Cola bottles in front of him and smiled at the press, saying "agua" (water).
The reaction to Ronaldo's humorous gesture caused a rush of news headlines claiming that his actions had wiped $4 billion off Coca-Cola's market value.
Some commentators believed that a single man from a small country might bring down a large US corporation. Others complimented influencers' ability to shape public opinion and advocated that more businesses should include them in their marketing strategies. Yet so much of this speculation was based on a poor premise.
The incident emphasizes the significance of critical thinking for business leaders and the general public, particularly in this day and age. Nonetheless, there were other factors that affected Coca-Cola’s stock price.
“Some non-alternative facts:
Coca-Cola has 4.3 billion shares, and closed on Friday, June 11, with a share price of $56.16 for a market value of $242 billion.
On Monday, June 14, Coca-Cola opened lower, at 9:30 a.m. EST.
At 9:40 a.m. EST, its stock price was $55.26 (down 1.6%) and the market value had dipped to $238 billion, $4 billion lower than the prior day.
Cristiano Ronaldo moves the Coca-Cola bottles at 9.43 a.m. EST, and says “Água”.” (IESE Business School, 2021)
Coca-Cola's market value was already down $4 billion by the time of Ronaldo's snub. In Addition, Coca-Cola shares became ex-dividend on June 14, which happened to coincide with Ronaldo's conference call. In fact, Coca-stock Cola's rose 0.30% from the time CR7 shifted the bottles (9.43 a.m. EST) to the end of the Wall Street trading day, valuing the company $1.3 billion higher than the incident.
Basically, in non-economic terms, it was all a matter of perfect (or imperfect, rather) timing, and it had nothing to do with Ronaldo's Coke move. We can learn from this moment how important it is to be objective and rational, and always check your facts before spreading information that may be misleading.
Bibliography
Express Web Desk. (2021, June 16). After Cristiano Ronaldo snub, Coca-Cola lost $4 billion. The Indian Express. https://indianexpress.com/article/business/world-market/coca-cola-share-price-slips-1-6-per-cent-market-valuation-lost-usd-4-billion-cristiano-ronaldo-gesture-euro-2020-7361343/
González, M. (2021, June 16) La millonaria caída de las acciones de Coca-Cola tras el polémico gesto de Cristiano Ronaldo. [Photograph] Ok Diario. https://okdiario.com/eurocopa/millonaria-caida-acciones-coca-cola-polemico-gesto-cristiano-ronaldo-7377215
IESE Business School. (2021, June 19). A Post-Truth World: Why Ronaldo Did Not Move Coca-Cola Share Price. Forbes. https://www.forbes.com/sites/iese/2021/06/19/a-post-truth-world-why-ronaldo-did-not-move-coca-cola-share-price/?sh=52458e9aefbb