Why did Sainsbury's shares drop 3.8% today?

Sainsbury’s (LSE: SBRY), Britain’s second-largest supermarket chain, saw a decline in its shares today. The reason behind this drop in share prices is that the company went ex-dividend, resulting in a decrease of 3.8%.

This decline took place during a rather gloomy trading session for the stock market overall. Even the FTSE 100 Index experienced a downturn, falling by 0.32% and reaching a value of 7,599.74.

When the trading day concluded, J Sainsbury closed 23.50 pence lower than its highest point over the past 52 weeks.

Additionally, it’s worth noting that the trading volume for J Sainsbury PLC stood at 2.4 million shares. This volume is 3.9 million lower than the stock’s 50-day average volume of 6.3 million shares.

Now, you might be wondering, what does “ex-dividend” actually mean?

“Ex-dividend” is a term frequently used in the world of investing and stocks. When a company declares a dividend payment to its shareholders, there are certain dates associated with the process. The ex-dividend date is a crucial one. It is the date on or after which a buyer of the stock will not receive the upcoming dividend payment. In other words, if you purchase shares of a company after the ex-dividend date, you will not be entitled to receive the dividend.

In the case of Sainsbury’s, the decline in share prices occurred because the company went ex-dividend. This means that investors who bought the stock after the ex-dividend date would not receive the dividend payment, leading to a decrease in demand for the shares.