Coca-Cola loses billions in market value after Cristiano Ronaldo snub
Shares of Coca-Cola fell after soccer superstar Cristiano Ronaldo opted to switch two bottles of the carbonated beverage for water before recovering in early trading on Wednesday.
Video transcript
JULIE HYMAN: Coca-Cola is not necessarily seeing a lot of action at the moment, but it did earlier today. It's something that our Brian Sozzi flagged, and it has to do with Cristiano Ronaldo, the soccer player. Take a look.
CRISTIANO RONALDO: Agua.
- Coca-Cola.
JULIE HYMAN: So in case you missed that, couple of Cokes sitting in front of him, moves them to the side very deliberately, hold up his bottle of water, says agua.
Brian Sozzi, that was enough to send the shares down, although they've come back since then.
BRIAN SOZZI: Agua. Agua for life. But yes, this is not a good look. And we flagged this last-- we flagged this last week, Coca-Cola starting to become a potential meme stock. Now I don't expect it to be extremely volatile. It's not going to turn into an AMC or a BlackBerry or a GameStop any time soon. But it is a stock that the meme crowd has started to talk about on Wall Street Bets.
So I'm not surprised, given that visibility that started last week when the meme stocks were rallying, to see it being the top trending ticker on Yahoo Finance right now, really under the assumption, I would suspect, that Ronaldo has 400 million social media followers on Instagram and Twitter combined. Maybe that message he just sent to the world, on the world stage, to not drink Coca-Cola products, maybe drink water instead because it's healthier, does that impact sales? Unclear, wildly unclear. But at least that's how the market is reading at it today.
I think the bigger picture, though, is that Coke's business does continue to recover, especially as live events are reopening. I suspect you'll hear some more of that language when Coke reports in a couple weeks, guys.
MYLES UDLAND: A couple of takeaways here. First, Euro 20-- is it Euro 2020? I guess technically the branding is Euro 2020, even though it's 2021. Reminder, soccer, football, massively popular internationally. And obviously we forget about that here in the US. So when Ronaldo, coming off Portugal's win yesterday, says something in a press conference, it's a huge story.
Now the reason this became a story is I believe both The Guardian and the Telegraph running a headline saying that Ronaldo's move there, pushing the Coke bottles to the side in his press conference, cost the company $4 billion, something to this effect, which gets to another kind of pet-- it's not a peeve, I mean, it is what it is-- but the market capitalization, market capization, however you want to say it-- I think capization is probably better-- of all kinds of financial data, like the stock market gained $10 billion in value, stock market passes $7 trillion in value for the first time, Bitcoin moves to X billion market cap, whatever it is-- is just a-- like I don't remember that framing on every piece of stock move. I don't know if you guys feel like this is a new development as well.
But talking about everything in terms of how much market cap is gained and lost feels like a new innovation. And I don't know, it just is a weird way to frame this kind of story. Coke shares were down like 3/10 of 1%, but framing it as a $4 billion loss because he pushed over the Coke bottles. It's just a strange framing, even though technically, like, yeah, I guess they lost $4 billion in market cap. But I mean, the market cap goes up and down a billion dollars all the time, Sozz. It just feels like-- it just feels like a weird framing on the whole story.
BRIAN SOZZI: Myles you can appreciate this. Large round numbers, usually over a billion dollars, or over $500 million, they just click well. Hate to say it. It's just how it goes in the business.
MYLES UDLAND: Look, yeah, we're waiting for Dow 30-- well, Dow 36,000 is really the milestone we're waiting for. And we have Kevin Hassett on to talk about that. But yeah, I mean, look, we love the round numbers. It just, talking about everything in market cap terms, I don't know, feels weird.
JULIE HYMAN: Well, and the stock is back to flat now.
MYLES UDLAND: Right. It's like who cares? The stock did not move. This is not actually a market mover for Coke. Like to be clear, this is not a material impact on the company's stock. But, now it is. I don't know. Everyone's going to see this video. I mean--
BRIAN SOZZI: I don't think this is going to cause them to warn on earnings. I don't see Coke out here warning on their full-year guidance because of this. But again, the market is real time. It's forward looking. That's what the market does.
