Filings, Insiders & OwnershipExtended setexperimental liveNew

Item 3 02 Unregistered Equity Short

Updated eventData needs: lowshort only

1993

Hertzel, M., Smith, R. (1993). "Market Discounts and Shareholder Gains for Placing Equity Privately." Journal of Finance 48(2), 459-485. Wruck, K. (1989). "Equity Ownership Concentration and Firm Value." Journal of Financial Economics 23(1), 3-28.

Read the paper →

In plain terms

When a company files an 8-K disclosing a private equity placement (often at a discount), it signals balance-sheet pressure and dilution. Short for 2-6 months.

How it works

8-K Item 3.02 (Unregistered Sales of Equity Securities) reveals a PIPE or unregistered share issuance, typically at a discount. Hertzel-Smith 1993 documents negative long-run drift after PIPEs (signaling weak balance-sheet conditions and dilution). Short the post-filing window for 60-180 days.

Live results

0 times picked on its own · 2 times inside a blend (1 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 2 such blended picks (1 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)

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Data dependencies

Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
SEC 8k events
Item-coded 8-K events (1.01 material agreements, 4.02 non-reliance, etc.).

Expected edge

Reported return: -4 to -9% over 6-12mo
Tested over: T+1 to T+180d

Hertzel-Smith 1993; -4 to -9% over 6-12mo on PIPE/unregistered issuance.

Related families

Item 2 03 Debt Obligation ShortFilings, Insiders & Ownership

Companies that issue new debt (Item 2.03) tend to underperform for 6-12 months. Managers often issue debt when their equity is overvalued or balance-sheet pressure is rising.

Item 1 02 Termination Material Agreement ShortFilings, Insiders & Ownership

When a company terminates a material contract (Item 1.02), it signals lost revenue or a broken strategic relationship. Short for 1-3 months.

Explore Item 3 02 Unregistered Equity Short on alphactor.ai

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