Platinum Asset Management Ltd (ASX: PTM) shares have crashed to a record low on Thursday.

In morning trade, the fund manager's shares dropped as much as 26% to 63 cents.

Why are Platinum shares crashing today?

While there hasn't been much to smile about as a Platinum shareholder for some time, today's decline could arguably be classed as good news.

That's because the decline has been caused by Platinum's shares going ex-dividend for an almighty dividend payment.

When a share goes ex-dividend, it means that the rights to the payout are now settled. As a result, if you were to buy its shares now, you wouldn't receive the dividend on pay day even though you have them in your portfolio.

Instead, the dividend will find its way to the seller of the shares, even though they no longer hold them.

And as a dividend makes up part of a company's valuation, a share price will drop to reflect this. After all, you wouldn't want to pay for something you won't receive.

The Platinum dividend

After its takeover talks with Regal Partners Ltd (ASX: RPL) collapsed on Monday, the struggling fund manager attempted to ease the blow by confirming plans to pay a big special dividend.

The Platinum board determined to pay a fully franked special dividend of 20 cents per share. Based on yesterday's close price of 85 cents, this equates to a sizeable 23.5% dividend yield.

Management revealed that it believes that after the payment of this special dividend it will still have sufficient working capital to pursue its growth initiatives.

Eligible shareholders can now look forward to being paid this monster dividend on 31 December.

Should you invest?

Analysts at Bell Potter don't believe that investors should be buying the dip. They recently downgraded the company's shares to a sell rating.

Commenting on its performance in November and before the takeover collapsed, the broker said:

This was a bad month for PTM even excluding the loss of the institutional mandate. The Regal Partners offer to acquire PTM, was first revealed on 17 September. At present, with RPL shares at $4.00, that offer that would now be worth about $1.30/sh including a 20c special dividend.

PTM offered due diligence on 4 October, expecting RPL to make a higher offer. Given the passage of time, and the passage of net flows (-$1.2bn, or -10% in the last two months), we are not sure if that RPL's offer is still "live." PTM have not revealed any higher offer from anyone else.

If RPL's offer is still "live", we believe the PTM board should probably recommend it. We struggle to see how they will deliver more to shareholders than the $1.30/sh that is, (or was) on the table. While PTM does have a turnaround strategy, it is uncertain, long term, and difficult to quantify. For our investment case, we now assume that PTM will not be acquired, and we move our recommendation to SELL. We increase our assumed outflow rate from 8% to 15%.