Today, The Bowser Report issued a daily mover alert on Newtek Business Services (NEWT), which gained 10% or more today.
Today is NEWT’s ex-dividend day, or the last day for shareholders to buy/sell shares and be considered/not considered for the upcoming dividend. On a stock’s ex-dividend date, the share price is negatively adjusted by the amount of the dividend, usually going unnoticed.
Larger dividends are noticed, as is the case with NEWT’s special dividend of $2.69 per share. Friday’s $17.22 close was adjusted for the dividend, equalling a close of $14.53. Therefore, rather than dropping $2.91 (16.9%), NEWT slid just $0.22 (1.51%). Yahoo! Finance and others may not have accounted for the dividend, but your brokerage (TD Ameritade for example) should have.
MORE ON THE DIVIDEND: On Oct. 1, NEWT announced a special dividend of $34 million total (at the time $3.29 per share based on 10.3 million shares) payable on December 31, 2015. With the recent 2.3 million share offering, there are now 12.6 million shares outstanding (for a dividend of $2.69 per share). Only 27% of the dividend will be paid in cash, the rest will be awarded in shares.
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