Business News Fri, 18 Jun 2021

How a Cristiano Ronaldo gesture tumbled a beverage company's market share

• Footballer, Cristiano Ronaldo has been linked to a dip in shares of global brand, Coca-Cola

• Reports say the celebrated player endorsed water over the global beverage

• A Ghanaian journalist has been providing the reasons this is so

When Cristiano Ronaldo chose to hold up a bottle of water in place of the Coca-Cola bottles clearly put in front of him to serve as an advertisement, it was bound to have very dire consequences on the global brand.

Almost coincidentally, the shares and market value of Coca-Cola, according to espn.com, nosedived from 1.6% to $55.22 and from $242 billion to $238 billion, respectively.

The website reports it as, “Cristiano Ronaldo's removal of two Coca-Cola bottles at a Euro 2020 news conference coincided with a $4 billion drop in the market value of the American drink giant.

“Ronaldo, an advocate of a healthy diet, moved the glass bottles out of the camera frame and instead held up a bottle of water and said in Portuguese: "Water!"

“Coca-Cola saw its share price drop by 1.6% to $55.22 soon after Ronaldo's actions. The market value went from $242bn to $238bn -- a $4bn drop."

But how exactly did this happen? A Ghanaian journalist with Multimedia Group, George Wiafe, provides a breakdown of things and how this has come to be.

“You could look at Ronaldo as an influencer, someone that a lot of people follow and for a lot of people who might have invested in Coca-Cola, and Coca-Cola is listed on the Stock Market and most of these developed markets, anything that happens in that economy, impacts on that product.

“The comments – a president of a bank could make a comment and then people will react and all of those things. And so most of these investors in Coca-Cola, their fear was that Ronaldo went out to tell people that, ‘Don’t drink Coke, drink water,’ the fear was that, that advice could impact on the demand of the product.

“For these direct shareholders and investors, if it impacts on the demand for the product, that rippling effect could be on the company’s revenue (profit),” the journalist explained.

He also gave insights into what might have pushed investors and shareholders out that quickly.

"Some of these investors thought that if this could affect demand for the product, can I get out now, so that I absorb [those] shocks that will come to the company, just like the share price because of this advice that, 'Don't drink Coca-Cola, Drink water, it'll impact on demand, it'll impact on revenue and it'll also come and hit the company revenue and profit as well.

He continued that, "So, you'll realize that some of these shareholders, tried to get out quickly by selling off their shares t a very low price because they want to get out quickly and that us why a little over a dollar, lost a share of the value of Coca-Cola.

"Don't forget that Ronaldo just didn't remove the brand away but went ahead to tell people that it is not good for you than going for water."
Source: www.ghanaweb.com