Cristiano Ronaldo Did Not Cause The Drop in Coca-Cola Share Prices — Here’s Why

Correlation does not imply causation. Yet, when has that ever stopped journalism?

Juventus mega star Cristiano Ronaldo is claimed to have moved Coca Cola share price with his denial of the beverage in the pre-match press conference of the Euro 2020 Football Championship Opener. The star player preferred water over cola and the rest of the world preferred convenient lies over actual truth.

I say this, because after Ronaldo’s gesture, the world took their attention to the $4 billion price drop over Coca Cola shares and concluded that Ronaldo was the cause of it. But was he really?

What is the truth behind this new internet hysteria? Let’s find out.

What Caused The Drop?

There’s no point challenging the narrative without alternative facts. In this case, two facts are undeniable. Ronaldo did decline the Coca Colas placed in front of him in the press conference. It is also true that, Coca-Cola’s value was down $4 billion by the time the press conference was over.

What other facts are at play in driving the share price down?

The timeline of the drop reveals a different story.

• On Friday, June 11, the market closed with Coca Cola having 4.3 billion shares each with a price of $56.16 and a total market value of $242 billion.
• On Monday, June 14 at 9:30 A.M, Coca-Cola opened lower starting at $55.69.
• At 9:40 A.M of the very same day, the price went down to $55.26 and the market value dropped to $238 billion. A dip of 1.6% and $4 billion lower than last week.
• At 9:43 A.M, Cristiano Ronaldo moved the Coca Cola bottle and said “Agua”
• From the time of Ronald’s gesture( 9:43 A.M) to the end of the trading day, Coca Cola went up. Adding $1.3 billion in value.

We can conclude here that the drop did not follow Ronaldo’s gesture, in fact it precedes it although only by a couple of minutes. If you are skeptical over this coincident timing then let’s put that to rest. The market in the US was trading low at the time( 9:40 A.M), you can look at Ford Motor company too, which had a drop of $2 billion.

I started this piece reminding you of the fact that correlation doesn’t confirm causation. But here we see, there’s very little to correlate as well.

Now, it is hard to draw a conclusive cause for the drop but when the market is performing low, it’s not uncommon to see these fluctuations. Add in the fact that June 14th was the fixed ex-dividend day where shareholders receive their dividend payment and its contribution to the event is also made clear. With Coca Cola stocks ceasing their dividend rights, the stocks prices adjust to a lower number.

Hilariously, all this coincided with Ronaldo’s “Agua” moment.

Does It Matter?

At a time when celebrities like Elon Musk are playing the economy with a few cryptic tweets, it’s a bit of a painful necessity to keep watch on the movements of the market and realize how much influence these individuals hold. When your average person reads an article over Ronaldo bringing doom to a multinational company single handedly, it either instills false hope or false panic. Neither of which are ideal outcomes.

Our goal is always to raise financial literacy — exposing the market movement and flimsy narratives surrounding it is part of that venture.

Although, this particular case goes beyond financial literacy. This is one of the many examples of journalism in the new age being fueled by misinformation and vapid conjecture. In this case, the current narrative is the most interesting one, a mere coincidence is not a news that sells so the coincidence has to be twisted to become a cause. These methods can be harmful to the collective consciousness of the general populace over news of any topic.

So yes, it does matter.

What Is To Be Done?

While there are better sources that can help you learn ways of combatting misinformation in media, with regards to the market, there’s an effective idea to share.

Keep watch of the market. Ideally, you should have some stakes in the market yourself. Have stocks that you are interested in trading or investing. When you’re more aware of reading charts and following trends, news like this can easily be verified by yourself. After all, the timeline provided above is all freely available information.