An 8K is a filing with the Securities and Exchange Commission (SEC) from a public company that is making a big change or announcing a big event that could have a material impact on the stock price.
The SEC is a government agency that exists to protect public market investors and ensure that markets function smoothly and fairly.
Can you imagine if you held stock in a company that was making an acquisition and didn’t tell you about it? 8Ks can announce an acquisition, bankruptcy, a corporate restructuring, changes to members of the board of directors, a capital raise or other similar events.
Here’s an example: recently, Dominion Energy (D) - Get Report, a large power and energy company, filed an 8K because it was selling its natural gas assets to Warren Buffett’s Berkshire Hathaway for almost $10 billion.
If you’re an investor in Dominion Energy, you want to know how Dominion is managing its assets. Dominion is raising cash so that it can invest in other parts of its business and deciding not to focus on natural gas. Maybe you disagree with that strategy. Maybe you agree and you’ll want to buy more shares. This is why Dominion filed an 8K.
So let’s say you hold stock in a company that’s in the news and there are conflicting reports on the company and questions around a corporate action that may impact earnings for the company.
To see more about how to navigate an 8K, watch the quick video above.