It looks like ASX investors are on track to record a rare break this Friday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has risen by a decent 0.42% and is back over 7,780 points. But let's talk about what's happening with the WiseTech Global Ltd (ASX: WTC) share price today.
Unlike the broader market, the WiseTech share price is not pushing higher this session. In fact, it's going the other way. This AX 200 tech stock closed at $84.80 a share yesterday afternoon. But this morning, those same shares opened at $84.70 each and are now trading at $83.52, down a hefty 1.5%.
So, what's up with WiseTech shares today that have prompted investors to buck the market and send the company lower?
Well, WiseTech's drop shouldn't disappoint any investors. It's happening thanks to perhaps the best reason a share can drop in value on the ASX. WiseTech has just traded ex-dividend.
It was only late last month that we got WiseTech's latest earnings report. As we covered at the time, this was an exceptional report, with WiseTech delivering a 17% increase in revenues for the six months to 31 December to US$381 million. Earnings before interest, taxation, depreciation, and amortisation (EBITDA) rose by 28% to US$192.3 million, while the company's underlying net profits after tax spiked 34% to US$202.7 million.
This all helped WiseTech to fund a whopping 31% increase for its next interim dividend, which will be worth 6.7 US cents per share, fully franked.
It's this dividend that, in all likelihood, is moving the WiseTech share price today.
WiseTech share price slumps as stock trades ex-dividend
Whenever a company declares a dividend payment for shareholders, it must also nominate an ex-dividend date. This date typically occurs a few weeks before dividend payday and draws a line in the sand over which investors are eligible for the payment.
If investors own shares as of the market close on the trading day prior to the ex-dividend date, they are locked in to receive the dividend. However, if an investor buys the shares on or after the ex-dividend date, they leave the rights to the payment behind with the seller.
Given that today is WiseTech's ex-dividend date, the eligibility window for this company's latest payment has just closed. The value of the WiseTech share price has just been adjusted to reflect that the shares are now inherently less valuable as they no longer come with the rights to the latest dividend attached. We normally see shares behave this way on their ex-dividend date.
We don't yet know what the final amount in Australian dollar terms will be. That determination will be made on 18 March. However, at current exchange rates, it looks as though it will be worth something close to 11 cents per share.
Eligible investors can now look forward to receiving WiseTech's latest dividend on 11 April next month.
At current pricing, WiseTech shares are trading on a dividend yield of 0.24%.
