Did Ronaldo's Gesture Really cost Coca-Cola 4Bn Dollars?

Last week, Cristiano Ronaldo was seen moving two bottles of coca-cola in a press conference while asking people to "Drink Water".

This gesture was well-received as an athlete he was standing for something he believed in, unlike Indian celebrities like SRK and Ajay Devgan who shamelessly promote and endorse stuff like "Vimal - Zubaan Kesari", anyhow that's a rant for another day.

Many news articles also came out claiming that this gesture has made Coca-Cola's market cap fall by 4 billion USD in one day.

But are the markets really that reactive to one move by a famous public figure(Elon Musk rant to be uploaded later) for a company's evaluation?

Actually, it looks like Coca-Cola had already lost USD 4 Billion in market value before the footballer moved the bottles.

How the events took place :

Friday, June 11 - Coca-Cola has 4.3 billion outstanding shares which closed at USD 56.16. The total market value USD 242 Billion.

Monday, June 14 - 9:40EST - 3 minutes before the move the share price dipped to USD 55.26 that is USD 0.90 or 1.6% lower than its closing value on Friday. Which actually is not that big of a deal for a person who follows the stock market regularly. The total market value now is USD 238 billion.

9:43EST same day Cristiano Ronaldo moves the Coca-cola bottle.

So why did the share price drop?

1. Coca-cola shares became ex-dividend on the same date

Ex-dividend describes a stock that is trading without the value of the next dividend payment. The ex-dividend date or "ex-date" is the day the stock starts trading without the value of its next dividend payment.

Typically, the ex-dividend date for a stock is one business day before the record date, meaning that an investor who buys the stock on its ex-dividend date or later will not be eligible to receive the declared dividend. Rather, the dividend payment is made to whoever owned the stock the day before the ex-dividend date.

Thanks, Investopedia :P

What this means is Coca-cola shares were expected to trade at a lower value as they would now not include the USD 0.42 dividend per share which was announced on April 21, 2021.

2. The entire US market traded low on June 14

Most companies dropped that day including giants like ford motors. So it can be called a market sentiment for that day.

Fun Fact: Surprisingly share price of Coca-cola rose by USD 0.30 per share which is almost 1.3 billion of the company's market share.

So it's like the age-old adage 'There is no such thing as bad publicity', this reminds me of another example when people started burning Nike products and Nike actually got free publicity and people were actually buying products to burn them. But that's a fun story for another day.

Until Next time!