If the price of a share automatically declines the same amount as the dividend on the ex-div. date why don't people short the stock right before the ex-date and then when the share price drops relative to the div. payout cover the short and make a profit. Example, shares of Company A are trading at $10.00 a share on Dec 2, Gordon Gekko decides to short the stock. On Dec 3 the stock goes ex-div. and Company A is paying a 10% div or $1.00 per share. Because of this the stock opens at $9.00 a share to reflect the dividend. Why can't GG cover the short at $9.00 and walk away with a $1.00 per share profit? Is this illegal or is there some regulation to prevent this?