How does the dividend declaration affect the stock’s ex‑dividend date and potential short‑term price movement?

Dividend impact on the ex‑dividend date

When a company announces a dividend, the board also sets a record‑date and an ex‑dividend date (usually two business days before the record date). The ex‑date is the cut‑off point for who will receive the $0.18 per‑share payout. Although the press release does not give the exact date, you can expect the ex‑dividend to fall within 1–2 weeks after the announcement (most quarterly announcements are timed to a regular quarterly schedule). Once the ex‑date is announced, the stock will trade “cum‑dividend” up to that day and then open “ex‑dividend” at the market close on the day before the record date. Traders should mark the ex‑dividend date on their calendar and anticipate that the market will price in the dividend value immediately after the market closes on that day.

Short‑term price dynamics and tradeable implications

1. Price adjustment – In an efficient market the stock typically drops by an amount close to the dividend amount (≈ $0.18) on the ex‑dividend date, all else equal. If KPTI is trading at $5.00, a $0.18 payout represents a 3.6 % adjustment. Expect a modest, predictable dip; any deviation (e.g., a smaller drop) may signal buying pressure or a broader market move that overrides the mechanical “dividend drag.”

2. Technical context – Check the price relative to recent support/resistance levels. If the stock is near a strong support zone, the dividend‑driven dip could hold the price above that floor, providing a low‑risk entry for a short‑term “buy‑the‑dip” play. Conversely, if the stock is over‑bought (e.g., RSI > 70) and the ex‑date approaches, the inevitable price drop can be used as a short‑term profit‑target or a stop‑loss trigger for existing long positions.

3. Actionable trade – For traders looking for a dividend capture, consider buying no later than the day before the ex‑date (i.e., on the last cum‑div day) and plan to sell once the stock opens ex‑div, aiming to capture the $0.18 dividend and any residual upside (e.g., a small “dividend bump” if demand remains high). The trade‑off is the risk of a larger-than‑expected price drop; thus set a stop‑loss at about 0.5 %–1 % below the entry price to protect against a steeper decline. Conversely, short sellers can target the predictable ex‑div dip, but must be aware that the dividend is payable to the holder of record, so a short position must be closed or covered before the record date to avoid dividend‑payment liability.

Bottom line: The $0.18 quarterly dividend will create a predictable, roughly $0.18 price decline on the ex‑dividend date. Use that expected move to either capture the dividend (buy‑and‑hold through the ex‑date) or to short the anticipated dip, but align the trade with technical support/resistance and protect the position with tight stops, as broader market sentiment can amplify or dampen the mechanical price adjustment.