Schedule 13D Explained: How to Track Activist Investors
When an activist crosses 5% ownership, they have 5 days to file a Schedule 13D. That filing often precedes double-digit stock moves. Here's how to read them.
Most investors tell you nothing about what they're doing. Activists are different.
When someone crosses 5% ownership in a public company and plans to do something about it, they have to file a Schedule 13D with the SEC. The filing covers more than just how many shares they own. It explains what they're planning to do with them. Push for board seats. Demand a sale. Replace the CEO. It's all there, in writing, legally required to be accurate.
I find this genuinely useful. A Harvard study found 10.3% excess returns in the 18 months around 13D filings. NYU researchers measured similar numbers: 10% abnormal returns around the filing, another 11% over the following year. These aren't small effects.
By the time someone files a 13D, they've done serious homework. They've accumulated a sizable stake. They've decided this company is broken enough to fight over publicly. That's information worth having.
The Basics
Schedule 13D is the SEC's disclosure form for investors who own more than 5% and intend to influence management.
The key word is "intend." Cross 5% and you have to disclose, but the form you file depends on what you're planning. Activists (people who want board seats, operational changes, management shakeups) file 13D. Passive investors (index funds, pensions, people who just like the stock) file 13G, which is shorter and asks fewer questions.
The distinction matters because 13D filers have to explain themselves. A 13G just says "we own this much." A 13D says "we own this much, and here's what we're going to do about it."
Who Files These Things
The obvious answer is activist hedge funds. Elliott, Icahn, Pershing Square, Starboard, Third Point. Names that show up in proxy fights and hostile takeover headlines.
But it's not just them. Corporate acquirers file 13Ds when they're building a stake before making a bid. Private equity firms file when they're thinking about taking a company private. Sometimes it's a wealthy individual who got annoyed at how a company is being run. Sometimes it's a group of shareholders who coordinated to cross the threshold together.
The common thread: anyone who wants to actively push for change has to file the long form. You get to make noise, but you have to show your cards first.
What's Actually in the Filing
The form has seven items. Most are boring. Item 4 is where you find out what's actually happening.
Items 1 through 3 are housekeeping. Which company, which securities, who's filing, where the money came from. Item 2 is worth a glance if you want to know who's actually behind the filing. A "XYZ Partners LP" filing doesn't tell you much, but the disclosure of the general partner and their track record does. Item 3 matters if you care about staying power: an activist who paid cash has different flexibility than one who borrowed heavily to build the position.
Item 4 is the reason these filings move stocks.
This is where the filer has to describe what they're planning. The SEC specifically asks about stuff like mergers, asset sales, board changes, changes to the dividend or capital structure, delisting. Real activists are explicit here. They'll write something like "The Reporting Persons intend to engage in discussions with the Board regarding alternatives, which may include a sale of the Company or the return of capital through dividends and buybacks."
Some filers hedge. "May seek," "reserve the right to." But usually the intent is clear. You don't file a 13D instead of a 13G unless you're planning to make some noise.
Items 5 through 7 cover the numbers (how many shares, recent transactions, cost basis), any agreements with other shareholders, and exhibits. If the activist already sent a letter to the board, it might show up as an exhibit. Worth checking.
The Deadline Changes
The SEC shortened these filing windows in 2024 for the first time in decades.
Used to be you had 10 calendar days after crossing 5% to file. That's a long time. An activist could keep buying for ten days before anyone knew they were in the stock. Now it's 5 business days. Amendments went from "promptly" (which meant whatever you wanted it to mean) to 2 business days.
The filing cutoff also got extended to 10pm Eastern, which is a minor thing but gives filers a few extra hours on deadline day.
Why does any of this matter? Because the old rules let activists accumulate bigger positions at lower prices before the market caught on. The new rules compress that window. If you're tracking these filings, information hits the market faster now.
When Passive Becomes Active
Here's something that tripped up a lot of institutional investors: you can start as a 13G filer and get forced into 13D territory.
The SEC clarified in 2024 that if you "exert pressure" on management, you lose your passive status. Threaten to vote against directors, launch a proxy contest, make public statements demanding changes. Any of that means switching to 13D, which comes with a cooling-off period: no voting, no buying more shares for 10 days after filing.
This spooked some big asset managers. BlackRock and Vanguard types who do routine "engagement" with companies suddenly had to figure out where the line was. Some reportedly canceled meetings with management just to be safe. The guidance created real tension between the SEC's definition of "passive" and what institutional investors consider normal shareholder engagement.
Why These Filings Move Stocks
When Starboard discloses a 5% stake and says they want board seats and a full review of operations, that's not speculation. It's a roadmap. They've committed real capital and they're legally bound to pursue what they've disclosed.
The research backs this up. The Harvard study I mentioned earlier showed 10.3% excess returns over 18 months. The NYU study found 10% around the filing, 11% more the following year. These are averages, obviously. Some activist campaigns fail. Some stocks already priced in the activism. But on average, a serious activist taking a public position is a material event.
What Separates Interesting 13Ds from Noise
Not all of these are worth your time. A 5.1% stake with vague "may engage in discussions" language is different from a 9% position with a detailed plan to spin off a division.
First thing I look at is how big the position is relative to the activist's fund. Someone putting 5% of their capital into a single name is making a concentrated bet. Someone who bought just enough to cross the threshold might be testing the water, seeing how management reacts before committing more.
Then I read Item 4 for specificity. "Maximize shareholder value" is filler. Every 13D says that. But "spin off the European division, initiate a $500 million buyback, and add two independent directors" means they've done real work. They have a plan.
I also think about who's filing. Has this activist won before? Icahn has a different playbook than, say, a first-time filer. Some grind through multi-year proxy fights. Others prefer quiet conversations that end in settlements without a public battle. Knowing the style helps you predict what happens next.
The target's defenses matter too. A company with a classified board, poison pill, and supermajority voting requirements can drag out any fight for years. A company with annual elections and no takeover defenses is more vulnerable.
One more thing worth watching: amendments. An activist who started at 5% and filed an amendment showing they're now at 8%? That's conviction. They're doubling down. A position that stays static for months is a weaker signal.
Finding 13D Filings
These are public the moment they hit EDGAR. You can filter by form type "SC 13D" to see everything filed today, or search by company to see historical filings.
Earnings Feed includes 13D and 13G filings in the live feed alongside everything else. Company profiles show beneficial ownership history.
Financial news will usually pick up major activist positions within hours. But by then, the fast money has already reacted. Reading the filing yourself, especially Item 4, gives you an edge over the headline summary.
The Short Version
Someone with money and conviction has decided a company needs to change. They've crossed 5%, filed their plans with the SEC, and now they're committed. Not every campaign works. But the filing itself tells you a sophisticated investor did real research, built a real position, and believes the stock is mispriced enough to fight over publicly.
When a new 13D drops, read Item 4 before relying on headlines. The activist's words, in the filing itself, tell you exactly what they're planning. That's rare.
Browse recent filings to catch 13Ds as they hit, or set up a watchlist to track companies you care about.