Schedule 13D is an

SEC filing The SEC filing is a financial statement or other formal document submitted to the U.S. Securities and Exchange Commission (SEC). Public companies, certain insiders, and broker-dealers are required to make regular SEC filings. Investors and financi ...

that must be submitted to the US

Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

within 10 days by anyone who acquires

beneficial ownership In domestic and international commercial law, a beneficial owner is a natural person or persons who ultimately owns or controls an interest in a legal entity or arrangement, such as a company, a trust, or a foundation. Legal owners (i.e. the own ...

of more than 5% of any class of publicly traded securities in a

public company A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange (l ...

. A filer must promptly update the Schedule 13D filing to reflect any material change in the facts disclosed, including, among other things, the acquisition or disposition of 1% or more of the class of securities that are the subject of the filing.

Form uses

13D filings allow the investing public to see who a public company's large shareholders are, and, perhaps more importantly, why they have an interest in the company. These filings may be a precursor to

hostile takeover In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to ...

s, company breakups, and other "change of control" events.

Reading the form

Schedule 13D consists of seven different sections: * Security and Issuer - This section contains basic information regarding the type and class of the security and the contact information of the owner. * Identity and Background - This section contains even more background into the owner, including if they were involved in any criminal activity in the past. * Source and Amount of Funds or Other Considerations - This section lets investors know where the money is coming from. The most important use for this section is in determining if a buyout situation is overleveraged, when a majority of the purchase is

leveraged In finance, leverage (or gearing in the United Kingdom and Australia) is any technique involving borrowing funds to buy things, hoping that future profits will be many times more than the cost of borrowing. This technique is named after a lever ...

or borrowed capital. * Purpose of Transaction - This is the most important portion of the 13D filing. It allows you to see why they are buying shares in the company, whether it be for acquisition, hostile takeover,

proxy battle A proxy fight, proxy contest or proxy battle (sometimes even called a proxy war) is an unfriendly contest for the control over an organization. The event usually occurs when a corporation's stockholders develop opposition to some aspect of the corp ...

, or simply because they believe it is undervalued. * Interest in Securities of the Issuer - This section states the express purpose of the transaction, which should be explained better in section 4 (Purpose of Transaction). * Contracts, Arrangements, Understandings or Relationships with Respect to the Securities of the Issuer - This section contains any special relationships between the owner and the company. This is important to be sure that the buying is legitimate and not just a friend purchasing stock or the result of some other agreement. * Materials to Be Filed as Exhibits - This is the second most important section. It contains any exhibits that may be filed along with the form. This is famously used for the filing of letters to management in the event of a hostile takeover. Exhibits can also elaborate on the Purpose of Transaction (Section 4).

Services

An aggregate database of schedules 13D, 13G, 13F are provided by private service providers such as Edgar.

Form uses

Reading the form

Services

See also