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Dale Jackson

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Poor medal count for Olympic stocks

Dale Jackson

After spending an estimated one billion dollars on television and Internet advertising, shares in most of the biggest corporate sponsors actually lost ground.

If it was money well spent should be determined when quarterly earnings results come due, but for the short-term it seems there weren't a lot of impressionable investors among the estimated 30,000 average prime time television viewers.

Sure, it was a tough couple of weeks on the broader markets with lingering credit concerns, weak earnings and talk of global recession. From the opening ceremonies on August 8th to the tail end of the events on August 20 the benchmark S&P 500 declined in value by 2.29 per cent. Regardless, over half of the major sponsors in the U.S. and Canada saw their stock drop even more. Of course, several factors move a stock and the influence of mass advertising is debatable, but just for fun here's the medal count:

GOLD

Visa Inc. sits atop of the podium after its stock posted a 1.57 per cent gain between the opening ceremonies and August 20th. Shares in the global credit card issuer began trading publicly last March at $44 and closed at $74 nearing the Olympic closing ceremonies. Last month Visa reported a 41 per cent quarterly profit increase over the previous year thanks to the world's love affair with greater and greater debt.

SILVER

Shares in Canada's Leon's Furniture Ltd. increased 0.84 per cent over the course of the Olympics. The home furnishing retailer with the quirky ads got a bit of relief from a seven per cent year-to-date decline thanks to an earnings report released during the Olympics that showed a 17 per cent profit increase.

AT&T shares the silver after its stock squeaked out a 0.32 per cent gain. Shares in the telecommunications giant are up four per cent so far this year thanks in part to its relationship with Apple Computer and the launch of its iPhone.

BRONZE

Some major sponsors saw their share price fall during the Olympics but they still outperformed the broader index. BCE dipped slightly by 0.22 per cent. The stock has been floundering in the midst of a company takeover that was mired in legal wrangling. The takeover is proceeding but it is possible investors drew more hope from the fact that those annoying beavers are no longer featured in Bell commercials.

Kraft Food's Inc. dropped 0.43 per cent despite a 3.5 per cent profit increase in late July and a generally positive outlook for the global consumer staples sector.

Another global consumer staple stock, Johnson & Johnson, declined 0.56 per cent following a year-to-date advance of 6.7 per cent.

Shares in General Motors Corp. took a 0.8 per cent downturn as it struggles through its latest restructuring. Trading below ten dollars, GM has not seen its stock this low since hoodlums had short hair and terrorized patrons at malt shops.

Speaking of hoodlums in malt shops, Coca-cola stock fizzled by 1.95 per cent. There can't be much fizzle left considering shares in the soft-drink maker are down 11.5 per cent so far this year.

THANKS FOR SHOWING UP

In the true spirit of the Olympic Games everyone is a winner. But even the stocks that failed to outperform the broader index test the limits of tolerance. Here's a breakdown of the other major sponsors and how their stocks performed during the Olympics:

Dale Jackson has been a producer at Report on Business Television since its launch in September 1999.

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