- The Washington Times - Monday, November 29, 2004


LONDON — A former Wall Street stockbroker plans to start a hedge fund in an ambitious drive to halve the value of Coca-Cola’s shares within 12 months.

Max Keiser, 44, a self-described “investment activist,” has teamed up with the London-based editor of the Ecologist magazine, Zak Goldsmith, to set up a fund that plans to repeatedly “sell short” shares in the Atlanta-based beverage giant.

Under the high-risk ploy, the hedge fund would borrow shares at current market rates and sell them, gambling that the shares are poised to fall. This would let the fund buy the shares back at a lower price and pocket the difference after returning the stock to the lender.

The hedge fund would lose money if the value of Coke stock goes up, but the anti-capitalist Mr. Keiser predicts that a worldwide Coke boycott he is supporting will cause the stock to tumble and the amount in the fund to climb.

He said profits would be given to Third World projects that benefit perceived victims of Coke’s business model.

“Activists from around the world are going to get a big bang for their dissent buck,” Mr. Keiser said, adding that the response to the fund “has so far been overwhelming.”

He predicts the tactic will knock Coca-Cola shares from their current value of nearly $40 down to $22 by late next year.

Mr. Keiser worked on Wall Street in the 1980s before co-founding a Web site called the Hollywood Stock Exchange, a game that allows players to trade shares of music, movies and celebrities. Mr. Keiser sold the site to broker Cantor Fitzgerald.

Mr. Keiser’s new project is the Web site, www.Karmabanque.com, which says that “it’s time to take down Coca-Cola.”

The site laments the amount of sugar in the soft drink and criticizes the world’s largest soft drink company for an array of tactics, including an apparent plan to put Coke logos on baby bottles.

Mr. Keiser plans to register his Coca-Cola hedge fund by early next year in Britain, and to solicit investments from activist billionaire George Soros and a number of other wealthy investors in the hope of generating up to $100 million.

He said that the Ecologist’s Mr. Goldsmith would monitor the campaign and decide how to spend any proceeds.

“There are many people who oppose the way Coca-Cola operates,” he said.

Mr. Keiser contends that Coca-Cola has destroyed land in India and disregarded human rights in Colombia.

Ben Deutsch, a Coca-Cola spokesman in Atlanta, said Mr. Keiser’s campaign was bizarre and built completely on falsehoods.

“It’s unfortunate that anyone would attempt to hurt Coca-Cola shareholders by waging such an effort without knowing and recognizing the facts,” he said.

Mr. Keiser said he also hopes to take advantage of a backlash against U.S. foreign policy spreading in some parts of the world that he believes is affecting even the biggest U.S. brands in important markets.

Reeling from a prolonged sales downturn in North America, Germany, and other markets, Coca-Cola — which has been battling sluggish sales for years — was forced to lower its key long-term earnings and sales targets in mid-November.

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