Why the Fortescue (ASX:FMG) share price is crashing 11% today

The Fortescue share price has started the week deep in the red…

| More on:
share price plummeting down

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Fortescue Metals Group Limited (ASX: FMG) share price is the worst performer on the S&P/ASX 200 Index (ASX: XJO) on Monday by some distance.

At the time of writing, the iron ore giant's shares are down a sizeable 11% to $18.59.

This latest decline means that the Fortescue share price is now down 30% from the record high of $26.58 it reached at the end of July.

Why is the Fortescue share price crashing lower?

The good news for shareholders is that the weakness in the Fortescue share price on Monday has nothing to do with its operations or the iron ore price. In fact, the latter rose 3.8% on Friday night.

Rather, this sizeable decline has been driven by the company's shares going ex-dividend this morning for its upcoming final dividend payment.

When a share trades ex-dividend, it means it is trading without the rights to an impending dividend payment. As a result, a share price will usually drop in line with the dividend amount to reflect the fact that new buyers of the shares will not be receiving it.

The Fortescue dividend

In the case of Fortescue, last month the mining giant released its full year results for FY 2021 and declared a massive fully franked $2.11 per share final dividend.

This huge payout is reflective of its strong shipments, low costs, and sky high iron ore prices, which underpinned bumper free cash flows during the 12 months.

Based on the Fortescue share price at Friday's close, this final dividend represented a 10% dividend yield. Which explains why its shares are falling so heavily today.

Eligible shareholders can now look forward to receiving this dividend in their bank accounts in a touch over three weeks on 30 September. Unless of course they are taking advantage of the company's dividend reinvestment plan.

Should you invest $1,000 in Nextdc Limited right now?

Before you buy Nextdc Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Nextdc Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why ANZ, Brainchip, Light & Wonder, and Pilbara Minerals shares are falling today

These shares are tumbling on Thursday. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Aurizon, JB Hi-FI, Nuix, and Platinum shares are tumbling today

These shares are falling on hump day. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why HMC Capital, Platinum, Sigma, and Skycity shares are dropping today

These shares are having a tough session on Tuesday. But why?

Read more »

Oil worker using a smartphone in front of an oil rig.
Energy Shares

ASX 200 energy shares plunge on shock OPEC move

ASX 200 energy shares like Woodside and Santos are tumbling on Monday. Let’s find out why.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Brainchip, Helia Group, Reliance Worldwide, and Westpac shares are dropping today

These shares are starting the week in the red. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Block, Corporate Travel Management, Judo, and Zip shares are sinking today

These shares are missing out on the good times on Friday. But why?

Read more »

Man with a hand on his head looks at a red stock market chart showing a falling share price.
Share Fallers

These were the worst-performing ASX 200 shares in April

These shares were out of form last month. But why?

Read more »

Man waiting for his flight and looking at his phone.
Travel Shares

Corporate Travel shares crash 11% as Trump tariffs bite

Trump’s tariffs are roiling Corporate Travel shares on Friday.

Read more »