item 5 01 change of control drift
What it checks
An 8-K Item 5.01 (change of control) is a rare corporate event that typically drifts higher for 1-3 months as deal terms get priced in.
Mechanism
8-K Item 5.01 (Change in Control of Registrant) is a discrete, rare governance event. Target firms exhibit positive post-announcement drift as the deal terms become clearer to the market. Distinct from m_and_a_arb (which targets the spread on announced deals): this catches the moment-of-filing event window.
Signal rule
Any 8-K Item 5.01 filing on T+1 fires LONG, hold 30/60/90d.
Data dependencies
daily_pricesAdjusted-close OHLCV for every US-listed ticker; primary price feed.
sec_8k_eventsItem-coded 8-K events (1.01 material agreements, 4.02 non-reliance, etc.).
Expected edge
- Paper alpha
- +3 to +6% over 30-90d
- Paper window
- T+1 to T+90d
Bradley-Desai-Kim 1988; +3 to +6% over 30-90d on the post-filing drift.
Related families
item 5 02 management change driftText & Filings8-K Item 5.02 (Departure/Appointment of Directors or Officers) flags a management change. Forced CEO/CFO turnover (post-underperformance) is followed by positive multi-quarter drift as the market re-rates the firm under new leadership. Routine retirements are noise; the harness sorts the two with MC permutation + cost stress.
m and a arbEvent-DrivenWhen a ticker files an 8-K with Item 1.01 (Entry into Material Definitive Agreement) or Item 2.01 (Completion of Acquisition or Disposition), the stock often experiences directional drift over 1-3 months as the deal plays out or the market re-rates the combined entity. We treat this as a coarse-grained M&A play (distinct from arbitrage on announced deals which needs target prices): long any ticker that filed a relevant 8-K Item for 21-63 days post-filing.
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