The new Form 8-K disclosures

Abstract

The Securities and Exchange Commission (SEC) has mandated new disclosure requirements in Form 8-K, which became effective on August 23, 2004. The SEC expanded the list of items that have to be reported and accelerated the timeliness of these reports. This study examines the market reactions to 8-Ks filed under the new SEC regime and investigates whether periodic reports (10-K/Qs) became less informative under the new 8-K disclosure rules. We observe that the newly required 8-K items constitute over half of all filings and that most firms disclose the required items within the new shortened period (four business days). We find that all disclosed items (old and new) are associated with abnormal volume and return volatility around both the event and the SEC filing dates, and some items have significant return drifts after the SEC filings. Surprisingly, we find that the information content of periodic reports has not diminished by the more expansive and timely 8-K disclosures under the new guidance, possibly indicating that investors may use periodic filings to interpret the effects of material events that had been disclosed earlier.

Are managers strategic in reporting non-earnings news? Evidence on timing and news bundling

“…Specifically, Lerman and Livnat (2010) find that disclosed events are associated with economically and statistically significant abnormal volume and equity return. Furthermore, 8-K filings are associated with analyst revisions (Livnat and Zhang 2012) and improved forecast accuracy (Rubin et al 2016).…”

“…To mitigate this issue when examining whether there is heightened market reaction to disclosure of positive news non-ATH, one has to identify a priori positive news and match forms reported non-ATH with forms reported ATH based on the news score. However, among the items reported on Form 8-K, only Item 3.02 ''Unregistered Sale of Equity'' is considered positive news ex ante (see Lerman and Livnat 2010). Since there are only 1300 8-K forms Are managers strategic in reporting non-earnings news?… with Item 3.02, the power of the test is likely low.…”

“…This particular setting holds several benefits. First, the 8-K form provides economically important information (Lerman and Livnat 2010). 1 Second, the form consists of several mandatory items and a voluntary items section, allowing us to examine whether the reporting strategy relating to mandatory and voluntary news differs.…”

Shareholder Litigation and Corporate Disclosure: Evidence from Derivative Lawsuits

“…Third, we also complement our main disclosure measure with the frequency of 8‐K filings. Prior studies such as Carter and Soo [] and Lerman and Livnat [] show that 8‐K filings produce information relevant to financial markets and contribute to the price formation process. In addition, an important feature of 8‐K filings is that, although the majority of the items in the 8‐K filings are mandatory, the SEC allows substantial managerial discretion in filing decisions for several items.…”

Does news uncertainty matter for commodity futures markets? Heterogeneity in energy and non‐energy sectors

“…We also focus on the long-term effects of news-based uncertainty on commodity prices. It is important to note that existing evidence is limited to a comparatively narrow event window of the first few days after the news release (Lerman & Livnat, 2010;Loughran & McDonald, 2011;Heston & Sinha, 2017;Jegadeesh & Wu, 2013;Tetlock, 2007). However, Adrangi, Chatrath, Christie-David, Hong, and Ramchander (2015) rationalize that macroeconomic news has little effect on immediate supply and demand of commodities, and have no bearing on contemporary prices.…”