The Fortescue share price has cratered 13% in a week. What's going on?

The ASX 200 giant has had a tough slog over the last seven days.

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Key points

  • The Fortescue share price has plunged nearly 13% over the last seven days to trade at $16.04 right now
  • Much of that fall was recorded on Monday when the company traded ex-dividend
  • Additionally, the iron ore price has been suffering recently amid major lockdowns in China

It's been a rough week for the Fortescue Metals Group Limited (ASX: FMG) share price. It's plummeted 12.92% over the last seven days despite the company's silence.

Stock in the resources giant is trading at $16.04 a share at the time of writing, slipping 2.43%. That's despite it closing at $18.42 last Wednesday.

To further compare its performance, the S&P/ASX 200 Index (ASX: XJO) has dumped 3.6% over the last week and the S&P/ASX 200 Materials Index (ASX: XMJ) has fallen 7.2%.

So, what's been weighing on the Fortescue share price lately? Keep reading to find out.

What's been weighing on the Fortescue share price?

The Fortescue share price has put on a disastrous performance over the last week. But part of its tumble was well warranted.

The company's shares traded ex-dividend on Monday. That meant anyone snapping up the stock from then on out has missed out on the company's upcoming $1.21 fully franked dividend.

A company's share price generally falls in line with the value of its upcoming payout on its ex-dividend date. However, the Fortescue share price only fell 79 cents – or 4.6% – on Monday.

The payout will start to land in investors' accounts from 29 September.

Additionally, to garner a broader understanding of what's been going on with Fortescue's stock, it's worth looking at what's been happening with the iron ore price.

Iron ore futures were trading at US$104.49 a tonne last Wednesday, according to CommSec. Its value has slumped to US$97.61 a tonne as of this morning, marking a 6.6% week-on-week fall.

The material's value has fallen amid COVID-19-induced lockdowns and restrictions in China. Of course, such a slump has likely weighed on the producer's stock.

It also might have had a hand in dragging the share price of Fortescue's peer, BHP Group Ltd (ASX: BHP), 10% lower over the week just been. Meanwhile, fellow iron ore giant Rio Tinto Limited (ASX: RIO) has seen its share price slump 5% over the last seven days.

Motley Fool contributor Brooke Cooper 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 Scott Phillips.

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