How to read a form 4
Making sense of these EDGAR filings.
Using the SEC's EDGAR search tool you've come across Form 4s and need a little guidance. Below is an example of a real Form 4 you can use as a reference.
Breaking it down
The reporting person is the individual filing this form.
The issuer is the company in which the filer is reporting a change in.
Table I shows changes in Non-Derivative Securities. This is where you'll find the majority of the transactions and likely the most relevant information. This area is where you'll find securities like Common Stock.
Title of Security
The type of security being handled in this transaction. A few examples are Common Stock, Convertible Preferred, Employee Stock Option. Interestingly, there is no uniformity used and we have over 10,000 different security titles recorded.
The date the transaction took place on. Remember, insiders have two days to file their Form 4 to the SEC and for that reason, we have multiple dates on the Form 4. Form 4s can also be filed in advance for scheduled transactions in which case the date would be a later date than the Form 4 was actually filed.
Deemed Execution Date
Deemed execution date is usually left blank. It is only required if the execution date for the transaction is calculated pursuant to §240.16a-3(g)(2) or §240.16a-3(g)(3).
The transaction code specifies the type of transaction. See transaction codes for a full list. A good starting point in understanding insider transactions is to remember that "P" means purchase or acquisition and "S" means sale or disposition.
Securities Acquired (A) or Disposed of (D)
This area shows the number of shares and at what price the securities were acquired (purchased) or disposed of (sold).
Amount of Securities Beneficially Owned Following Reported Transaction
This is the number of shares the filer owns after making the transaction they are reporting.
Table II shows changes in Derivative Securities. Table II is used much less frequently than Table I.
The footnotes explain abnormalities that may exist. These are not necessarily the most important but they will give you a much clearer understanding of what is really going on.
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