Ex-Dividend Date

A dividend comes with a short calendar attached. The company declares an amount, names a record date for who is on the register, and pays it some weeks later. The ex-dividend date is the one that matters to anybody transacting, because it is the day the entitlement stops traveling with the shares. Since US trades began settling one business day after the trade in May 2024, it falls on the same business day as the record date rather than the day before it.

Somebody holding the shares the day before it receives the dividend even if the position is sold the next morning. Somebody acquiring them on the day itself does not, and the payment goes to whoever held them before instead.

The share price typically opens lower on the ex-dividend date by roughly the amount of the dividend, which surprises people who see the drop and go looking for news. Nothing happened to the company. Cash is simply on its way out of it, and the quoted price reflects that the next owner is no longer entitled to that payment.