What does it mean?
Glossary
The SEC and exchange words that appear on the company profiles, in plain English: what they are and what they aren't. The same definitions the “?” next to each term opens.
8-K
- What it is
- The report a US-listed company files with the SEC, within four business days, when something important happens: results, a change of executives, an acquisition, an exchange deficiency notice… Each item carries a number, such as 3.01.
- It isn't
- A periodic report (those are the annual 10-K and the quarterly 10-Q), nor a HornScout assessment.
8-K 3.01
- What it is
- The 8-K item in which the company says the exchange has told it that it breaches a rule for staying listed, or that it is leaving that exchange or moving to another.
- It isn't
- The delisting itself: many companies fix the breach within the deadline.
Exchange deficiency notice
- What it is
- The letter in which the exchange (Nasdaq or NYSE) tells a company that it breaches a requirement for staying listed, such as the minimum price, and gives it a deadline to fix it. The company makes it public in an 8-K, item 3.01.
- It isn't
- A HornScout caveat or a delisting: it is a deadline to comply again.
Form 4
- What it is
- The filing an executive, a director or a holder of more than 10% of the company makes with the SEC when they buy or sell its shares, within two business days.
- It isn't
- A recommendation: an executive may sell to pay taxes, to diversify or under a plan set in advance.
Planned sale (Form 144)
- What it is
- The notice an executive or a controlling shareholder files with the SEC before selling restricted or control shares above a certain size. It announces the intention; the completed sale is reported later, in the Form 4.
- It isn't
- A completed sale: it may never happen, or happen only in part.
13D and 13G
- What it is
- The filings made with the SEC by whoever crosses 5% of a company's voting shares. The 13D, by someone who may want to influence how it is run; the 13G, the short form, by a passive investor, such as many funds.
- It isn't
- An offer to buy the company: it says who holds more than 5% and with what stated intention.
Reverse split
- What it is
- Merging several shares into one: in a 1:10 reverse split, every 10 shares become 1 and the price of each is multiplied by 10. Companies often use it to get back to the minimum price the exchange requires.
- It isn't
- A gain: that day what you hold is worth the same; only the number of shares and the price of each one change.
Percentile
- What it is
- Where a figure falls within its own history, from 0 to 100: percentile 18 means 18 out of every 100 earlier readings came in below it.
- It isn't
- A grade or a forecast: a low percentile isn't “bad” nor a high one “good”; it only places the figure.
Form 25
- What it is
- The form with which an exchange, or the company itself, tells the SEC that its shares stop trading on that exchange. The delisting takes effect about ten days later.
- It isn't
- A bankruptcy: the company may move to another exchange or to the over-the-counter market (OTC), or may have been acquired.
Caveat
- What it is
- Something worth a look in a name you follow, with its severity. It is recalculated every day.
- It isn't
- An order or a forecast: it says where to look, not what to do.