Wednesday, January 29, 2014

Is it time for Greenlight Capital to short stock of Sochi Olympic Sponsors ?

Hedge funds can probably make a killing by shorting stock of Sochi Olympic Sponsors

The marketing setbacks facing Coca-Cola's karmically-doomed sponsorship of the Sochi Olympics seem to be the tip of the iceberg.

Last year, former New York City Mayor Michael Bloomberg launched a highly-visible attack on super-sized sugary drinks, seeking to ban the sale of high-calorie drinks as a way to fight obesity and obesity-related maladies, like diabetes and heart disease. A court blocked Mayor Bloomberg's ban on large sugary-drinks, but Mayor Bloomberg's successor has vowed to fight to restore the ban. Efforts to improve its corporate image have also proved to be problematic for Coca-Cola after the corporation faced allegations that it was depleting ground water and contributing to pollution in India. Coca-Cola's role in creating water shortages in India have led some local authorities to suggest last week that they would take actions to demolish a Coca-Cola bottling plant in Uttar Pradesh.

Coca-Cola is still recovering from the shocking 2009 documentary exposé, The Coca-Cola Case, of its labour violations in Colombia, Guatemala, and Turkey.

Similarly, the damage that McDonald's is doing to its own reputation following it's own deadly silence on the violent Russian LGBT crackdown comes at a time when the world's largest hamburger chain is losing customer loyalty and is facing an embarrassing sales slump. "We've lost some of our customer relevance," CEO Don Thompson told Wall Street analysts during a conference call this week.

Separately, it's unclear how much the credit card issuer VISA stands to lose, if anything, from the recent spree of credit card fraud impacting several large American retailers.

Is it time for Greenlight Capital to create a bespoke basket of Olympic sponsor equities, and then short it ?

2014-01-27 at 21.44.49 Virtual Assistant Greenlight Capital Short Coca-Cola Stock Screen Shot photo 2014-01-27at214449VirtualAssistantGreenlightCapitalShortCoca-ColaStockScreenShot_zpsf71905ed.png