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16 June 2021

Did Cristiano Ronaldo give Coca-Cola a kicking?

The footballer's preference for water has been credited with a plunge in the company's stock price.

By Will Dunn

The day before he took to the pitch to demolish both Hungary and Michel Platini’s nine-goal record to become the top scorer in the history of the European Championship, on Monday (14 June) Cristiano Ronaldo paused to take a chunk out one of the tournament’s lead sponsors, Coca-Cola. Visibly annoyed at having been sat behind two (why would he need two?) bottles of the foaming brown hangover cure, Ronaldo moved the offending beverages out of shot before holding up his bottle of water. “Agua,” he declared, before muttering: “Coca-Cola, ugh.”

Top athletes know that the only agua worth drinking is agua that’s been mixed with HerbaLife24 CR7 Drive, a Ronaldo-branded powder that is 66.6 per cent sugar and which he has promoted since 2013. Elite athletes use CR7 Drive to wash down a KFC Ronaldo Pack, one of the special meals Ronaldo created with the Colonel as part of another lucrative sponsorship deal.

But for those with an eye on the markets, that Coca-Cola’s stock price took a 1.6 per cent dip during the trading day after the press conference was the big news. For a company with a market cap of around $240bn, that’s a few billion dollars. (Coca-Cola is traded on the New York Stock Exchange and the press conference took place in Hungary, so the market didn’t register its disapproval until the market opened in the US.)

Did Cristiano Ronaldo plunge Coca-Cola’s market value?
Coca-Cola Co’s market value ($) according to the New York Stock Exchange

But reports that “Ronaldo’s Coca-Cola snub costs company billions” have a whiff of artificiality ­– not unlike Soccerade, the bright blue football drink Ronaldo began promoting in 2009 – about them. For one thing, the drop in market cap isn’t money lost by Coca-Cola, but by its investors. A market dip would only cost Coca-Cola money if it happened just before the company planned to raise money by issuing new shares.

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Coca-Cola’s share price has been climbing steadily since January and remains close to the top of its range for the past 52 weeks. Pepsi, a stock to which Coke is closely correlated, also dipped as the market opened ­– as, in fact, did the whole market in which the company is traded.

Nicholas Johnson, an equity analyst at financial research firm Morningstar, calls it a “coincidental drop” that “could very well be spurious correlation. Celebrities can play a role in the positioning of brands in consumers’ minds, but the extent of this role is much more limited for an iconic brand like Coke.”

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Johnson says market data shows that while markets may jitter at the news cycle, “core consumers” of fizzy drinks are likely to remain loyal even if prices go up, and that’s what’s important to the company and long-term investor confidence in it. “Even the staunchest Cristiano Ronaldo fan, if they’re a core soda consumer, I don’t believe will be compelled to stop drinking soda because of this.”

So why does a narrative like this take hold? The answer is that increasingly, the socially agreed price of equities and other assets does appear increasingly tied to fame. When Kylie Jenner told her 24 million Twitter followers in 2018 that Snapchat had become “ugh”, the company’s share price took more than a year to recover, and the price of several cryptocurrencies appears mainly to be dictated by whether Elon Musk mentions them, even (or especially) if it’s all just a joke.  

Attention has become commodified to the extent that it moves markets in ways previously unseen, as the group psychology of the internet propels investment towards doomed chains of shops and cinemas. We are not yet at the point where a celebrity moving two bottles across a table can take down one of the world’s largest beverage manufacturers – but that doesn’t mean it’ll never happen.