Replies to post #114062 on Southridge Enterprises Inc (SRGE)

[1manband]

Yes, they do. That is a fact. You need to read that link again - the author is not disputing the stock price is adjusted for a dividend. Instead, the point of the article is that it has no effect on the long-term stock price as the market has already priced in the drop.

This is a much better article on the subject:

http://www.investopedia.com/articles/stocks/07/dividend_implications.asp#axzz2H2Ygllke

"Price Implications
When a dividend is paid, several things can happen. The first of these is what happens to the price of the security and various items tied to it. On the ex-dividend date, the stock price is adjusted downward by the amount of the dividend by the exchange on which the stock trades. For most dividends this is usually not observed amidst the up and down movement of a normal day's trading. However, this becomes easily apparent on the ex-dividend dates for larger dividends, such as the $3 payment made by Microsoft in the fall of 2004, which caused shares to fall from $29.97 to $27.34. (To read more, see Declaration, Ex-Dividend and Record Date Defined and Why don't investors buy stock just before the dividend date and then sell right afterward?)"

The downward is not often noticed as it just changes the closing price of the stock prior to the ex-dividend date. It usually does not drastically affect the price of the stock upon the next day's open. But, in SRGE's case, it is very noticeable as the stock is suspended and cannot trade after the ex-dividend date.