July 24, 2021

CR7 or ex-dividend. After all, what caused Coca-Cola’s shares to fall? – Markets

On Monday, June 14th, the preview conference of the match between Portugal and Hungary, from the first round of Group F of Euro 2020, had a moment that would go viral on social media. The captain of the national team, Cristiano Ronaldo, put away two bottles of the Coca-Cola brand and placed, in its place, one of mineral water. That same day, the shares of the American company fell 1.7%, in the middle of the session, but the two facts may not be related.

In that session, Coca-Cola entered into an ex-dividend regime, which takes place two days before a company begins to distribute dividends to its shareholders. And, as a rule, when a company enters ex-dividend, its shares on the stock exchange fall, since the value of the dividend is also discounted at the price of each share.

In this case, the company today paid an interim dividend of $0.4 per share, which began to be discounted last Monday. If we do not discount this value to the company’s quotation at the close of the session on Monday, the company would have ended the day with a drop of around 0.5%.

However, taking into account its market value (240 billion), the fall registered with the discount of the premium to be paid to shareholders meant a net devaluation slightly above 4 billion dollars. In total, the company will pay an annual dividend in the order of $1.68 per share to its shareholders, referring to last year’s transaction.

But the story took on other proportions, as the statements by Cristiano Ronaldo, who spoke that day at the joint press conference with Fernando Santos, national selector, occurred shortly after the opening of the markets on Wall Street, hence the association with the devaluation of Coca-Cola was made immediately. In the final stretch of the day, the title even managed to recover slightly, but without reaching a positive level.

What is certain is that Coca-Cola was forced to respond to Ronaldo’s attitude by saying that “Players are offered water, as well as Coca-Cola and Coca Zero, upon arrival at our press conferences.” The organization of Euro 2020 also came forward to defend the brand, since the soft drink company is one of the official sponsors of the competition.

After Ronaldo, French national team player Paul Pogba made a similar gesture, also at a Euro 2020 press conference, and moved a bottle of Heineken, a Dutch beer brand, from a prominent place at the foot of the MIC. But the company’s shares closed with a rise of more than 1%.