Cristiano Ronaldo and his team Portugal are out of the UEFA Euro 2020 soccer championship but the debate continues whether (or not) the football icon was solely responsible for The Coca Cola Company losing four billion dollars in market cap on the New York stock exchange (NYSE).
Minutes before a pre-match press conference on June 14, Ronaldo moved two Coca-Cola bottles placed in front of him and said “agua” (water) while smiling at the journalists.
Nuno Fernandes, author and professor at Spain’s IESE Business School (which has a partnership with Harvard Business School), pointed out that Coca-Cola shares opened lower on NYSE, at 9:30 am EST on Monday, June 14.
At 9:40 am EST, its stock price was $55.26 (down 1.6 percent) and the market value had already dipped to $238 billion, $4 billion lower than on Friday (June 11), when the share price closed at $56.16 for a market value of $242 billion. Fernandes pointed out that Ronaldo moved the Coca-Cola bottles at 9.43 am EST at his press conference.
He also said that Coca-Cola shares became ex-dividend on June 14. The date was announced more than a year in advance in the case of Coca-Cola, and on such days, share prices automatically adjust to a lower number. In this example, the ex-dividend date fell on the same day as Ronaldo’s pre-match press conference.
Coca-Cola’s share price went up to $0.30 at the end of the Wall Street trading day on June 14, adding $1.3 billion in valuation to the company, says Prof Fernandes.
Prof Fernandes, the author of The Value Killers. How Mergers and Acquisitions Cost Companies Billions and How to Prevent It and Finance for Executives: A Practical Guide for Managers, referred to this incident and the subsequent global news headlines as a ‘grave problem’ in the post-truth world.
Prof Fernandes points to a deluge of unsupported claims made every day by people whose prominence helps shape public policy and opinion. Sadly, their comments frequently influence decision-making, he said.
We must be wary of the dangers of accepting a single story as evidence even though good storytelling is a compelling tool for making a lively argument, said Prof Fernandes.