Coca-Cola’s market value dips by $4bn: Why?

The global beverage giant Coco-Cola’s market value dipped by $4 billion after the Portuguese footballer Cristiano Ronaldo pulled a stunt at a press conference in Budapest this Monday.

The football star, widely acknowledged as a health enthusiast, created a stir during the Portugal and Hungary pre-match press conference involving two Coco-Cola bottles. In a turn of events, the 36-year old footballer moved the carbonated bottles away from him and held a bottle of water, exclaiming, “Agua”, meaning water in Portuguese.

This little stunt made his opinion about carbonated soft drink quite clear.

As a ripple effect, the share value of this official Euro 2020 sponsor plummeted 1.6% from $56.10 to $55.22. Accordingly, the market capitalisation of Coca-Cola’s stock dropped from $242 billion to $238 billion in a few hours.

Indeed, the vocalised opinion of this pop-culture colossus has had a tremendous impact on Coco Cola’s market. The beverage company came on board as one of the official non-alcoholic beverage sponsors for the UEFA EURO 2020. The brand offers an assorted range of drinks to the players throughout the tournament.

Paul Pogba follows Ronaldo’s snub

A similar incident occurred a day after Ronaldo’s snub when France midfielder Paul Pogba removed sponsored drink from another Euro 2020 press conference. The football star removed Heineken beer as soon as he settled down to address the press meet after France’s 1-0 win against Germany in Munich.

The 28-year-old Man of the Match is a practising Muslim, and his religious beliefs may help connect the dots around this entire stunt. Unlike Coco-Cola, Heineken’s shares managed to shrug off this snub and surged by 1.7%. However, a delayed impact on Heineken share price could be underway.

Indeed, the stock could witness a drastic rise and fall in the share prices of some global brands if a few more footballers jump on this ‘bottlegate’ trend at the UEFA Euro 2020.

Conclusion

Both Coco-Cola and Heineken’s incidents are perfect examples of market volatility and how the smallest of things could snowball quickly. These incidents also offer an idea about how easily investors’ faith tend to waver when they speculate volatility on the horizon.

Since the stock market is beyond control, intending investors should focus on building a defensive portfolio that could help minimise volatility-induced losses. Additionally, they could consider diversifying their portfolio with various stocks and income-generating instruments to spread associated risks. This incident is also a lesson in how investors need to improve their share market understanding so they do not cave in during momentary trends and lose out on profitable stocks and ventures.