A judge has ruled in a 20 year old case that they must pay back 6 BILLION in back taxes. How has this not effected their stock price at all?
https://www.foxbusiness.com/markets/coca-cola-pay-6-billion-back-taxes-interest-irs-tax-court-ruling
Coca-Cola Puts looking real nice about now
byu/HellYeaRunThat inwallstreetbets
Posted by HellYeaRunThat
47 Comments
Already priced in. I’m not buying Cocacola anything until they put cocaine back in it.
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I know right. 2 and a half ~~years~~ *quarters* worth of profit destined to disappear and the stock price just trades flat. This was announced at the beginning of the week, but it hasn’t had any effect on anything. I can’t figure it out either. Same with Google’s judgement against them for anti trust activities; stock just doesn’t care at all.
This market is tough to get a read on.
Taxes are history. Market only looks ahead.
the first ruling was in 2020 which primarily went in favor of the IRS. they lost again, and i believe while they can appeal, they have to post up the money which is something like $2B billion the dispute and $4B in interest.
this payment will sting, as the annual cash flow from ops runs about $11B.
in a quick look at the financials, I did not see any reserves for this, so the accounting for this latest ruling will be interesting – will the payment be booked as a deposit, or will it be a hit to the P/L – while no one will care about whether this is a charge (as they will care about impact to cash flow and whether this ruling means the effective tax rate will rise going forward), the accounting and disclosure will be interesting.
“CocaCola gross profit for the twelve months ending March 31, 2024 was **$27.636B**, a 9.38% increase year-over-year.”
They sell sugar, water, and aluminum…3 commodities that are dirt cheap.
Are considered an American icon, and a symbol of global democracy.
Why the fuck would you think puts on them, ever?
Tax evasion already priced in
Well I did a little dd of my own, saw a degen with a similar Idea. Basically they have 9.2 billion free cash and make billions a year. Imo if they don’t have to pay back like 10 plus billion it will not touch the price if anything it might go up. Inverse
The reason it has not affected their stock price is because KO can afford to pay that tax bill and still make 20 billion in profit for the year.
Quite simple really.
Tell me you don’t know how big KO is without telling me you don’t know how big KO is lol
This is called a contingent liability and would have already been budgeted for long ago.
Calls
6b for coke? Whats that 10 secs of.profit. crumbs
This case is more than 20 years old.
They owe 6 billion.
Last year, revenue was 46 billion.
I think they’re fucken fine
Priced in. Non issue.
Unrelated, there’s also talk of dropping them from Olympic sponsorship since its not compatible with the spirit of the games to have a sugary drink that leads to health issues.
You mean the market had 20 years to price in the risk of that fee? You guys can pretend to read a balance sheet at least.
Because they made 80billion. Cost of doing business.
Does it say all at once, because they will make an agreement to pay it back over time, it wont even be a blip on their radar. Also it was originally 16 billion, so that tells they already want to help coke
Buffet is long on KO and not selling.
Coca-Cola is one of those stocks that’s basically an ETF, look at the chart that thing doesn’t move
also they’ve made that $6 billion back in the time between you seeing that article and posting it here, *and* they won’t pay it back for another 10 years
Do you drink coke?
Priced in
… you should do it op.
You should bet against CO lol
Look at revenue line on 10-K
4.31 B shares
39.41$ EPS
6 billion$ isn’t exactly a ton…
They will appeal and not pay or drag it out for a few more years why short now
As I saw it, the ko stock went up on the announcement. Why? Because it removes some uncertainty in ko financials. I’m just guessing. My ko stock is up over the last couple of years as I’ve bought it, though I haven’t had a ton of money to buy lots of ko.
If you’re going to do anything with puts on Coca-Cola on bad news, it should be shorting the puts. If you’re reading it it’s already priced in
Cause and effect bro
Priced in. I know about it which means the entire market knows about the 6B.
Coca Cola is the nectar of the gods.
Too bad I gave up caffeine.
affected
6 billion is nothing to KO regard
They probably already accrued it on the balance sheet in case they lost.
They need to bring back the cocaine part
Reads more like, Coke to increase revenues on bottlers by upping the price on their syrup parts
This is America. Only poor people pay taxes
Cuz Coke is the goat.
Dude, this is a win for them. They bring in $6B every few days.
You’re regarded. Coca Cola is one of the most stable stocks out there and they have all the bad press in the world and it hasn’t put a dent in their stock price. If funding paramilitaries and killing and torturing union leaders doesn’t tank their stock you think 6 billion will?
You must underestimate what $6 billion is to a nearly $300 billion market cap.
That’s a drop in the bucket.
Not only can they afford it like everyone else has mentioned, but they’re going to be able to pay it off on like a 20-year payment plan or something. Will have a very small effect on the business
You’re gonna bet against Warren Buffett?
They’re going to challenge the ruling.
Almost certainly they will be successful.
Lots of other companies do exactly what coke did – Amazon especially
Bullish 