There are a few reason why the stock price decreases after a dividend is paid:
- The stock price automatically decreases by the dividend amount to reduce "dividend capture", which is when traders try to buy a stock days before an expected divident and try to sell it a bit later.
- Stocks that pay dividends are making the choice to reward the stockholder with cash instead of reinvesting profits into the company to grow its business. When a pile of money gets paid to stockholders, that's a signal that the long term growth potential is decreased, at least a little bit.
What's the point of paying a dividend if the stock price automatically decreases? Don't the shareholders just break even?
Companies have to do something with their profits. They beholden to their shareholders to make them money either by increasing the share value or paying dividends. So they have the choice between reinvesting their profits into the company to grow the business or just handing the profits directly to the owners of the business (the shareholders). Some companies are as big as they want to be and investing their profits into more capital offers them diminishing returns. These companies are more likely to pay dividends to their shareholders.