Managers’ Strategic Use of Concurrent Disclosure: Evidence from 8-K Filings and Press Releases

Rawson, Caleb; Twedt, Brady J.; Watkins, Jessica

doi:10.2308/tar-2021-0088

Cited by 14 publications

(3 citation statements)

References 58 publications

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“…As noted by recent investigations of 8-K accelerated filing changes (Watkins, 2022, Rawson et al, 2022, the timing of disclosure and information issued around the time of the disclosure matters to investors. The Modernization of Beneficial Ownership Reporting rule reduces the maximum delay after the "trigger date," when a new owner meets or exceeds the 5% ownership level, from 10 business days to 5.…”

Section: An Example Schedule 13d Filingmentioning

confidence: 99%

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Shrinking the 13D disclosure window will benefit non-activist investors

Polk,

Buchheit,

Riley

et al. 2024

JFRC

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Purpose This study aims to examine the Securities and Exchange Commission’s final rule in Modernization of Beneficial Ownership Reporting, which reduced the time for significant public company shareholders to file Schedule 13D (effective February 5, 2024). The authors corroborate prior results under the historic 10-day maximum reporting regime and provide updated academic analysis regarding how the five-day deadline between the “triggering” event, accumulating 5% of the outstanding shares and public disclosure of that event will affect abnormal returns. Design/methodology/approach This empirical archival study uses publicly available data. Findings The analyses show that changing from a 10-day to a 5-day Schedule 13 disclosure window will reduce activist investors’ opportunity to profit by legally delaying the filing of Schedule 13D. These excess returns for delay exist regardless of the profitability or size of the target firm or the shareholder’s disclosed reason for filing. The authors conclude that accelerating the timing of the disclosure window is an improvement that is in the best interest of the general investing public. Originality/value To the authors’ knowledge, this is the only academic study of Schedule 13D filings to include the postpandemic period. As such, the authors establish an updated “baseline projection” for expectations regarding how the Modernization final rule will impact activist investors and stock returns under a five-day reporting regime. In addition, the authors measure and test abnormal returns after considering differences between “triggering” events and filing dates of Schedule 13Ds in the sample rather than grouping all filings. This approach allows the authors to account for the time difference between the triggering event and the filing date.

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Section: An Example Schedule 13d Filingmentioning

confidence: 99%

“…As noted by recent investigations of 8-K accelerated filing changes (Watkins, 2022, Rawson et al. , 2022), the timing of disclosure and information issued around the time of the disclosure matters to investors.…”

Section: An Example Schedule 13d Filingmentioning

confidence: 99%

Shrinking the 13D disclosure window will benefit non-activist investors

Polk,

Buchheit,

Riley

et al. 2024

JFRC

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“…Cohen et al (2015) found that insiders utilize the 4-day discretionary disclosure window to front-run their insider trades. Rawson et al (2020) looked at Form 8-K disclosures to study managers' strategic use of contemporaneous unrelated announcements events to mitigate Form 8-K disclosures. Ben-Rephael et al (2019) found that Form 8-K filings may have little direct information value, especially for retail investors.…”

Section: Form 8-k Disclosuresmentioning

confidence: 99%

Do Traders Front-Run News? Evidence From Form 8-K Disclosures of Class Action Lawsuit Settlements

Nguyen,

Vemala

2023

JAF

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Using a novel and unique dataset of class action settlement announcements from Form 8-K disclosures as a proxy for private information, we tested whether traders front-run on the announcements and whether traders capture cumulative abnormal return (CAR) surrounding the disclosures. Although overall volume does rise, there is no statistically significant evidence of front-running Form 8-K disclosures and no CAR surrounding the disclosures. This study, nonetheless, contributes to the literature by providing further evidence from a new dataset of class action litigation settlements that there is no front-running of news. The findings contribute to the contrary – albeit less popular – collection of studies that show traders do not have access to private information upon which to exploit through front-running to capture CAR.

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The power of not trading: Evidence from index fund ownership

Rawson

Rowe

2022

Rev Account Stud

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Managers’ Strategic Use of Concurrent Disclosure: Evidence from 8-K Filings and Press Releases

Cited by 14 publications

References 58 publications

Shrinking the 13D disclosure window will benefit non-activist investors

Shrinking the 13D disclosure window will benefit non-activist investors

Do Traders Front-Run News? Evidence From Form 8-K Disclosures of Class Action Lawsuit Settlements

The power of not trading: Evidence from index fund ownership

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