Filings, Insiders & OwnershipCore researchparkedNew

Item 5 03 Governance Change Short

Updated weeklyData needs: lowshort only

2009

Frydman, C. (2014). "The Governance Effect of CEO Pay." Annual Review of Financial Economics + Bebchuk, Cohen & Ferrell (2009) "What Matters in Corporate Governance?" Review of Financial Studies 22(2), 783-827.

Read the paper →

In plain terms

When a company quietly amends its charter or bylaws, it's often putting up takeover defenses or entrenching management — historically these moves predict ~3 months of underperformance.

How it works

8-K Item 5.03 (Amendments to Articles or Bylaws; Change in Fiscal Year) often coincides with entrenchment moves: anti-takeover provisions, board-size changes, supermajority-vote requirements. Structural governance changes (distinct from Item 5.02 officer departures) correlate with subsequent underperformance.

Live results

0 times picked on its own · 10 times inside a blend (4 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 10 such blended picks (4 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: -3% over 90d
Tested over: T+1 to T+90d

Bebchuk-Cohen-Ferrell 2009 + Frydman 2014; ~-3% over 90d on entrenchment shock.

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When a company starts filing many more 8-Ks than usual, it's often because something bad is being staged — short the stock through the disclosure storm.

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