There is a widespread hoax that says that if all the Chinese jump at the same time, the axis of the Earth would be altered. This is completely false, but it can be extrapolated to the stock market world. In recent months, a similar phenomenon has happened every time Elon Musk, CEO of Tesla, has published a tweet and has moved the market at will.
This Monday everything pointed to the fact that Cristiano Ronaldo was going to join the tycoon’s group of stock market influencers after removing two bottles of Coca-Cola from the press conference prior to the Portugal-Hungary match of the European Championship. This gesture, lasting just 20 seconds, coincided with the opening of the market in the United States. A bearish open for the sugary drink.
One plus one is equal to two. That is what everyone automatically thought, who did not hesitate for a second to blame the Portuguese footballer for the falls. However, as Fran Perea taught us in Los Serrano, sometimes one plus one equals seven.
When analyzing the falls of Coca-Cola this Monday, we must take into account a small detail that in the eyes of the viewer has gone unnoticed. And it is that it was the first day in which the dividend of 0.42 dollars that will be paid to its shareholders on July 1 was discounted. This money must be subtracted from the price because it no longer belongs to the company but to the shareholders. If this figure is taken into account, their titles only contracted 0.34%, or what is the same, 0.19 dollars.
The reality, beyond the viral phenomenon that has been mounted on social networks, is that when a share discounts the dividend, falls similar to its profitability are expected, in the case of Coca-Cola of 0.75%, or 42 cents. Some falls that in the case of the sugary drink have been minor. Conclusion? The effect of Cristiano Ronaldo on the price is neither here nor expected and it is just a new case of fake news.
Also keep in mind that Wall Street opens at 3:30 p.m. European time and that Cristiano Ronaldo did not withdraw the two bottles of Coca-Cola until around 3:45 p.m., when the stock was already falling.
And in millions, how much does it mean? Coca-Coca closed on Friday, naive of the one that was coming, at 55.74 dollars and with a market capitalization of 242,143 million dollars. The latter was reduced on Monday to 239,513 million. This represents losses of 2,360 million, just 1% of the total calculation, according to data from Bloomberg.
For sample, a button. If we go back to March 12, 2021, the situation is exactly the same but without Cristiano Ronaldo involved. As happened this Monday, that day was the first in which the stock discounted a dividend of $0.42, so the drop was 0.2%, very similar to this week. Everything indicates that the footballer’s gesture had little or nothing to do with the price. So why have we made him a villain?
“Obviously the most compelling narrative would be to link the drop in Coca-Cola stock to Ronaldo’s gesture, however it actually appears that the selling pressure was related to the stock exiting the dividend on the same day. A decline in stock value under these conditions is totally normal,” said Jesse Cohen, a senior analyst at Investing.
The story changes for the rest of the week. Cristiano Ronaldo’s video has gone viral and played millions of times, which added to the fact that Coca-Cola has not had an official statement explaining the falls has caused the snowball to get bigger and bigger.
“The most attractive narrative would be to relate the fall to Cristiano Ronaldo’s gesture”
Coca-Cola shares have continued to fall in the days since, down 0.25% on Tuesday and 1.34% on Wednesday, increasing its losses to $6.424 billion. Losses that are still very small if the company’s stock market size is taken into account.
It is precisely this snowball that has been created later what differentiates this situation from the previous ones in which Coca-Cola has paid a dividend. Returning to March, during the two subsequent days the price moved in the green, with increases of 1.33% and 0.37%.
In fact, experts are optimistic about the future. “As summer approaches, Coca-Cola remains one of the best values to own, considering the seasonal increase in demand for soft and sparkling beverages,” says Cohen.
Cristiano Ronaldo’s gesture has had more impact on the football field than on the parquet. Just two days later, on Wednesday the 16th, French footballer Paul Pogba joined his claim. But in this case with a bottle of non-alcoholic Heineken beer.
The events occurred with the market closed, so the reaction of investors did not occur until Wednesday the 16th. And, surprise! Heineken’s share, beyond moving in negative territory, closed with increases close to 1.4%. It would be necessary to go back to May 6 to find a higher rise.
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