Coca-Cola’s Reported $3 Billion Tax Bill

On Seeking Alpha, a Coca-Cola investor wrote that he sold 11,000 shares of Coca-Cola stock after reading a headline about its $3.3 billion tax bill, arguing that it turned the stock into dead money for a long time and reveal lack of controls at best and dishonesty at worst on behalf of Coca-Cola’s management.

I agree that it would be a concern for Coca-Cola shareholders if: (1) Coca-Cola had to actually come up with $3.3 billion in cash to pay tax bills to the IRS, and (2) the oversight was indicative of dishonesty or lack of controls at Coca-Cola.

Even in a worst-case scenario, I would find this news forgivable under both scenarios as a $3.3 billion bill represents about four months of Coca-Cola profits. It would be an unpleasant amount of money for the company to cough up, but it would still sail along over the long run. And … Read the rest of this article!