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This Day In Market History: Coca-Cola Launches New Coke

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This Day In Market History: Coca-Cola Launches New Coke

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened?

On this day in 1985, The Coca-Cola Co (NYSE: KO) replaced its long-standing Coca-Cola formula with a new formula branded as New Coke.

Where The Market Was

The Dow finished the day at 1,278.71. The S&P 500 traded at 181.88. Today, the Dow is trading at 26,511 and the S&P 500 is trading at 2,907.

What Else Was Going On In The World?

In 1985, Live Aid concerts in Philadelphia and London raised more than $50 million for famine relief in Ethiopia. The popular comic strip “Calvin and Hobbes” first appeared in U.S. newspapers. The average price of a new house was $89,330.

If It Ain’t Broke ...

When Coca-Cola unveiled New Coke, it wasn’t immediately clear to customers or investors that New Coke would be replacing the highly successful classic formula. Once customers found out they would no longer be able to buy the old formula, Coca-Cola was bombarded with angry calls and letters.

In the month following the launch of New Coke, the S&P 500 traded higher by 3.8 percent, but Coca-Cola stock tanked 6 percent thanks to the backlash. On July 11, Coca-Cola announced it would be bringing back the original formula under the name Coca-Cola Classic. New Coke was renamed Coke II in 1992. Coca-Cola continued producing the drink for another decade before finally discontinuing Coke II for good in 2002.

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