S&P/ASX 200 Index (ASX: XJO) communications share Nine Entertainment Co. Holdings Ltd (ASX: NEC) just fell off a cliff.
Nine Entertainment shares fell 36% from yesterday's closing value of $1.70 to an intraday low of $1.09 shortly after the market open.
The ASX 200 communications share has since rebounded a little to be trading at $1.14, down 33% at the time of writing.
Meanwhile, the benchmark ASX 200 is down 0.25% to 8,808.3 points.
The media stock is the biggest faller of the ASX 200 today by far.
So, what on Earth is going on with Nine Entertainment shares?
Image source: Getty Images
Why did this ASX 200 communications share just fall off a cliff?
Nine Entertainment's monster dividend is to blame.
Today, the ASX 200 communications share went ex-dividend.
That means it's no longer trading with the next dividend entitlement attached.
So, it's worth less to buyers today than it was yesterday.
In fact, it's worth a lot less given the dividend is a cracker at 53 cents per share.
That equates to just under a third of the stock's closing value yesterday.
Hence, the dramatic fall today.
There is no price-sensitive news out of Nine Entertainment this morning.
Nine Entertainment is one of more than 35 ASX shares going ex-dividend this week.
Here are some more details on the Nine Entertainment dividend.
Why was the Nine Entertainment dividend so high?
During earnings season last month, Nine Entertainment reported a 2% boost to revenue at $2.68 billion for FY25.
However, operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell 6% to $486.1 million.
Net profit after tax (NPAT) fell 10% to $194.4 million.
Fully diluted earnings per share (EPS) were 10.5 cents, down 10% on FY24.
Nine Entertainment declared a final dividend of 4 cents per share, fully franked.
But here's the kicker.
The company also declared a special dividend of 49 cents per share due to its divestment of the Domain property advertising business.
Nine will pocket $1.4 billion in cash proceeds from the sale of its 60% stake in Domain.
In FY25, Domain generated $413.3 million in revenue and contributed $146 million to Nine Entertainment's group EBITDA.
Investors loved the dividend news, with the ASX 200 communications share rising 7.6% on the day of the report.
The stock reached a new 52-week high of $1.90 that day.
Nine Entertainment shares will pay the dividend on 26 September.
ASX 200 communications share snapshot
The Nine Entertainment share price has fallen 8% over the past 12 months.
