Company Events & EarningsExtended setexperimental liveNew

Competitor Bad News Relative Long

Updated event-triggeredData needs: mediumlong only

1992

Lang-Stulz 1992 JFE intra-industry.

In plain terms

When a competitor blows up (bankruptcy, delisting, auditor disagreement), we go LONG the survivors because they pick up the market share.

How it works

In concentrated industries, severe bankruptcy / restatement events on one firm produce a *competitive* effect for surviving peers (share reallocation). Net +0.5% to +1.5% CAR over 5-20d.

Live results

37 times picked on its own · 63 times inside a blend (54 beat the stock) · updated 2026-06-06

This strategy is a frequent ingredient in blends that combine a few strategies on one stock. It has contributed to 63 such blended picks (54 of which beat simply holding the stock). Picking it on its own is only one of the ways it shows up.

How its picks scored vs. buy & hold

Each pick is graded on a recent year it was never tuned on, against simply owning the same stock

Where its edge concentrates

Share of picks in each company-size group that beat buy & hold

How often it trades

Active vs. patient. Bars on the left mean it waits for rare setups; bars on the right mean it trades often

Return vs. buy & hold

How much each pick beat or trailed simply owning the stock over the test year (extreme microcap moves trimmed)

Loading substrate evidence…

Data dependencies

Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
Tnic peers
Hoberg-Phillips text-based industry classification peer lists (annual).
SEC 8k events
Item-coded 8-K events (1.01 material agreements, 4.02 non-reliance, etc.).

Expected edge

Reported return: +0.5% to +1.5% CAR
Tested over: 1980s sample (Lang-Stulz)

+0.5% to +1.5% CAR over 5-20d (Lang-Stulz 1992).

Related families

TNIC Peer Event ContagionCompany Events & Earnings

When a stock similar to ours files an awful 8-K, ours often drifts down too over the next 1-3 weeks. We short alongside.

TNIC Momentum SpilloverPrice & Market Behavior

The 1-month lagged return of a stock's text-similarity peer basket (TNIC, crosses sectors) predicts the focal stock's next-month return.

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