Dividend question - stock goes down the same amount as the dividend?

Discussion in 'Stocks' started by OptionsOptionsOptions, Apr 6, 2021 at 7:07 PM.

  1. The stock goes down the same amount as the dividend - correct? All the dividend articles I find do not mention this.

    • $100 stock with $10 dividend.
    • You get $10 deposited into your account and stock goes to $90.
    • Your account balance remains the same.
  2. donnap


    In theory, yes.

    As you know, stocks are going to fluctuate regardless of the dividend.

    If the $100 stock only drops to 92, then it is effectively +2.
    OptionsOptionsOptions likes this.
  3. themickey


    Lets say stock drops to $90, the issue is, how long does it stay there?
    Point is, most drop down, some recover slow, others fast. A fast recovery is ok.
    OptionsOptionsOptions likes this.
  4. OK ..... thanks for the replies.
  5. csharpe


    Funny, I was just explaining this to a friend the other day because he was under the assumption that buying dividend stocks would get him the yield and stock appreciation without effort!
  6. Yes, they lower it by the amount of the dividend on ex-dividend date (I think that is the date). Which makes perfect sense. If a company has 100 shares, and its worth $100 a split second before it pays a dividend, or $1 a share, and it pays a $10 dividend, leaving it with $90 among 100 shares, leaving it with a value of 90 cents per share. Of course, right after the drop it will start bouncing around trading again.
  7. destriero


    Centuria100 likes this.
  8. themickey


    A strategy which can be employed, a day prior ex div day it will often dump, (profit takers who knew dividend promise would drive up price) they buy on the dump which often briefly exceeds the dividend amount (uninformed dumb money selling on panic).

  9. Thank you for applauding my rightness. I'm glad I have my very own personal female cheereleader!!!
  10. vanzandt


    Yeah. No one has ever thought of or noticed that one before lol.

    Wall Street is like Vegas Mick... if you have 'a system'... they'll send a limo to pick you up.
    When its all over, you'll be thumbing your way back home. ;)
    themickey likes this.