On the day after a dividend pay day, tons of people's dividend reinvestment programs buy more shares of the stock. Does this artificially inflate the value of the stock because people are buying just because they happen to have dividend money to spend, and not because of fundamentals relating to the stock? If so, are there arbitrage opportunities like longing the stock on the pay day (before the dividend is paid at the end of the day) and selling on the next day at 9:32am ET, or maybe buying the stock at 9:28am ET during pre-market and selling at 9:32am ET (since DRIP reinvests during market hours) on the day after the pay day?
Note that I'm not talking about the dividend itself or the ex-date. I'm talking about a price return opportunity due to people's dividend reinvestments inflating the price of the stock.
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