Probably more issues here than I intended, but:-

I have shares in the Bradford and Bingley, bought some while ago at 3.04. Their target price was reported then as 3.71.

Since then they have gone up and down,and after reporting record profits, they get a right going over from the Press and Financial Wizards, their standing is now mostly 'Avoid', so things are not looking too rosy.

I originally bought as a long term hold.

They have just gone ex dividend, which I thought meant that the Company hand back earnings to share holders.

That's nice except the share price has dropped more or less the same as the dividend, so in fact as it stands, I get my own money back!

Looks like I am pretty nieve, but how does this work, because for the best will in the world, it looks more like the dividend is dependant on the next period of earnings taking the share price back up?

Ringos
The share price should fall by the equivalent value to the dividend as the value of the company is reduced by the total paid out.
You may find the following editorial interesting. http://www.snappytrader.com/ta/ta.htm#divi
However generally the share price does recover faster than expected but of course this also depends on overall market sentiment.
D.

Thanks Crocodile.

I am at the link now.