Why did the Coca Cola (NYSE:KO) share price drop?
Shares in the beverage maker had lifted nearly 15% since February.
Shares in soft drinks giant Coca Cola Co. (NYSE:KO) have been a strong performer over the past few months as the company benefits from the reopening of movie theatres and restaurants in major markets. Overnight though, the stock dropped as much as 1.6% in US trading, before recovering some ground to end at US$55.41.
Why did the Coke share price fall yesterday?
The beverage giant ran into one of the greatest athletes in the world, and guess who came out the winner?
On Tuesday (early Wednesday NZST) football superstar Cristiano Ronaldo fronted Portugal’s press conference ahead of their Euro 2020 opener.
The Juventus forward looked at two glass bottles of Coca-Cola — one of the official sponsors of the tournament — and made his feelings pretty clear, deciding the soft drink didn’t belong on the table in front of him.
After putting the Coke bottles out of sight, Ronaldo held up a bottle of water and told the assembled journalists that people should just “drink water”.
The brutal dis-endorsement from one of the greatest footballers in history and one of the most influential persons on social media had an immediate effect.
Coca Cola shares dropped from US$56.10 to US$55.20 in a matter of minutes, wiping out an estimated US$4 billion in market value. The stock recovered some ground in late US trading.
Coke benefiting from reopenings
Coca-Cola was forced to issue a statement in response, saying “everyone is entitled to their drink preferences” and “everyone has different tastes and needs”.
But there is no doubt Ronaldo’s disapproval will hamper its ongoing recovery efforts.
The company has been losing market share globally in the non-alcoholic ready-to-drink industry since the onset of the COVID-19 pandemic.
That had started to change as key markets in the US and Europe started reopening after the rollout of vaccinations, and allowed restaurants and movie theatres, which record the biggest consumption of soft drinks, to resume trading.
That has been reflected in the company’s stock price, which has climbed nearly 15% since the start of February.
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