What happened

Shares of retailer Big 5 Sporting Goods (NASDAQ:BGFV) are down by 11.4% as of midsession Tuesday. The sell-off was triggered by plans for a special dividend payment, though the size of today's tumble is rooted in much bigger factors.

So what

Today is the ex-dividend date for the special dividend Big 5 Sporting Goods announced early this month. In addition to its regularly quarterly dividend of $0.25 per share, the company is also issuing a one-time special dividend of $1 per share to investors that own the stock as of today. The ex-dividend date is the day an adjustment of the stock's price is made to reflect the value dividend payment that's already been earmarked for today's owners.

Falling stock chart on a computer screen.

Image source: Getty Images.

Astute investors will recognize that the math of the market's ex-dividend adjustment doesn't quite jibe. Whereas the special dividend is worth $1, the stock's down nearly $4 per share on Tuesday. The bulk of today's weakness arguably stems from the fact that shares were well overbought as of the end of last week, and already in correction mode as of yesterday. Specifically, following the 82% advance between the end of October and Friday's close, today's 11.4% tumble translates into a week-to-date loss of more than 30%.

The ex-dividend price adjustment doesn't account for the bulk of today's or yesterday's weakness. It appears to simply be a catalyst.

And yet, there's still more to the story. Big 5 Sporting Goods is also one of the market's most heavily shorted stocks, and thus has been ripe for a short squeeze, a rally driven by the rush of buying that takes shape as short-sellers scramble to close out their risky bearish trades. Last week's unusual strength briefly looked like it could have been a short squeeze, but after that rally faltered, the stock was left all the more vulnerable to a pullback.

Now what

As is always the case, a stock isn't a worthy buy just because it's been steeply sold off. The company itself must still be worth owning.

But for investors who can stomach more volatility and who have been eyeing a purchase of Big 5 anyway, this week's pullback is a buying opportunity. The recent selling appears more reactionary than reasoned. You won't get the dividend, but the dividend isn't the chief reason investors would want to own this stock anyway.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.