Ronaldo did not shave $4 billion off Coca-Cola valuation, but here is why you want to believe so much that he did.

What Really Happened?

Before Portugal’s opening game against Hungary in the Euro 2020 tournament, Ronaldo walks into a pre-match conference. And two minutes before it began, the most followed celebrity on Instagram (with 300+million followers) took out the two Coca-Cola bottles placed in front of him and hid them. And while smiling at the journalists he said ‘agua’ (water in Portuguese) and gulped from a bottle of water.

While it seems like a harmful action to Coca-Cola branding efforts (Coca-Cola along with other top companies reportedly sponsored the tournament to the tune of $2.4 billion). The news articles that have followed crediting Ronaldo with the shaving of $4 billion of Coca-Cola valuation has been nothing short of ridiculous.

Now let’s look at the events of Monday 14th June again, but without our tinted glasses.

Let’s start from Friday 11th June: Coca-Cola’s share price closed the market at $56.16 per share and with 4.3 billion shares at a valuation of ~$241.488 billion.

Monday 14th June: By 9:30 am (when the NYSE opens daily) Coca-Cola’s share price started trading at $55.35 per share at about $238.005 billion valuation.

Monday 14th June: By 9:43 am, Ronaldo walked into the press conference and set aside two Coca-Cola bottles. By 9:45 am the share price of Coca-Cola dropped to $55.26 per share at about $237.618 billion valuation.

But here comes the interesting part,

Monday 14th June: By 4:00 pm (When the NYSE closes daily) Coca-Cola’s share price closed at $55.55 per share at a $238.865 billion valuation. A drop of $2.432 billion from the high valuation of $241.288 billion on Friday, but a bounce-back of about $1.29 billion from the time of Ronaldo’s snub.

So the facts are out there. Yes, Coca-Cola lost $2.632 billion the same day Ronaldo moved their bottles over. But was the loss before or after Ronaldo’s action?

Looking at the data without even any deeper analysis, not only did Ronaldo not shave $4 billion off Coca-Cola’s share price, he did not have anything to do with the share price.

The market had generally been down on Monday, which affected most companies trading on the NYSE. Pepsi was down about $1 billion that same day, Ford motors at about $2 billion.

A Post-truth Society.

While it seems like a harmless mistake in reporting news, it is a very dangerous one. And this has become our reality and increasingly so in this age of social media. Data can be manipulated and twisted to support a narrative. So the gullible (which we all are at some point) will believe the data-twisted ‘truth’ without any form of deep analysis. And then go ahead to share it as truth to other gullible people. We now live in a post-truth society.

So Ronaldo didn’t shave $4billion of stock value off, but here is why you want to believe it so much.

A post-truth society is a society where people are more likely to accept an argument based on their emotions and biases, rather than based on facts.

You are not logical, no matter how much you think you are. This is why you want to believe so much that Ronaldo caused Coca-Cola to lose $4 billion in one day. So it is easier to convince us emotionally than just with cold logic. It is just exciting to believe, so we are emotionally convinced before we even check the facts. I suspect that most people will still find my analysis hard to believe.

This piece of misinformation may not have any effect on you, but this way of reporting news can be and will be used against you. So, we have to become more careful. You cannot believe everything you see, even from reputable news sources.

Even though since we are emotional beings, we believe easily what moves us emotionally. We have to become more cautious about what we believe.

As an individual, you have to become aware of your biases and know when there are at play. There is nothing wrong with having biases, in fact, they help you process the huge flood of information out there. But biases can cloud your judgment, and make you suspect to confirmation bias. So whenever you agree with a viewpoint, ask yourself this -

“Do I agree with this viewpoint because it is true, or because I wish it to be true”?

You need to become more sceptical, less trusting of news, and always fact-check information.

And beware of sensational news. They are fun to read, give you an emotional high or low (depending on the intent of the author), and easy to share. But most of the times come with fact-twisted truths.

P.S Ronaldo gulped from a bottle of water after pushing aside two coca-cola bottles. Guess who the official water supplier at the Euro 2020 tournament is?

…Coca-Cola.