Campaign aims to hit Coke where it hurts
Former stockbroker joins forces with billionaire's son in ambitious attempt to 'bring down Coca-Cola' by devaluing drinks giant's shares
By Paul Marinko
Thursday November 25, 2004
An anti-capitalist former stockbroker and the son of Sir James Goldsmith have launched an audacious attempt to halve the value of Coca-Cola's shares.
The radical activist Max Keiser has joined forces with the editor of the Ecologist magazine, Zak Goldsmith, to launch a hedge fund that will donate the profits from short-sales in Coke's stock to the "victims of Coke's business model in places like India and Colombia".
The idea is that as a boycott spreads the money in the fund will increase as shares in the company drop.
Mr Keiser, founder of activist website Karmabanque.com, believes the stunt will reduce Coca-Cola shares from their current value of $41 (£22) to $22 (£11). The campaign says it will "commit to as much money as it takes to take down Coke", but Mr Keiser refused to say whether the son of the late billionaire had invested any money of his own in the project.
He said Mr Goldsmith's role in the campaign was to promote it in his magazine. Mr Goldsmith was unavailable for comment.
Last night Mr Keiser said the hedge fund already had "several hundred thousand dollars" in it despite not yet being listed, and he was approaching several big banking figures, including George Soros, to increase the value.
The high-risk strategy would see the hedge fund borrow shares in Coke from a broker and sell them at less than their market value, gambling on them dropping in value thanks to the boycott. It would then buy them back at less than it sold them for and pocket the difference before handing them back to the broker. But if the value of the stock goes up, the hedge fund will lose money.
Any profit made would be ploughed into supporting communities around the world that investors felt had suffered at the hands of Coca-Cola.
As Coca-Cola is one of the world's largest corporations and valued atabout $95bn (£50bn), the attempt is unlikely to succeed.
But Mr Keiser remained optimistic. "There's a general anti-American feeling out there which is growing all over the world," he said. "People now associate Coke's brand with the American brand and they are rejecting it across the globe. The company has never been more vulnerable."
Coca-Cola refused to comment last night: a representative said no one was available because of the Thanksgiving holiday.
Previous boycotts of major companies have had mixed results. Success stories include Barclays Bank deciding to pull out of apartheid South Africa in 1986 after a campaign halved the bank's share of student accounts. Greenpeace managed to slash Shell's pump sales with a boycott over plans to dump the Brent Spar oil platform in the Atlantic.
But the Baby Milk Action Group's boycott of Nestle has failed to damage the company in nearly 25 years. Likewise, it was not the Burma Campaign's boycott attempts of British American Tobacco that forced the cigarette company out of the country but pressure from the Blair government.
Guardian Unlimited (c) Guardian Newspapers Limited 2004
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