13D vs 13G: what a 5% stake filing means
Schedules 13D and 13G are filed when someone owns more than 5% of a company. The difference between an active 13D and a passive 13G, and why it matters.
The 5% line
When an investor ends up owning more than 5% of a class of a company's voting stock, they have to tell the SEC on Schedule 13D or Schedule 13G.
13D: may push for changes
A 13D is for investors who may try to influence the company: activists seeking board seats, buyers building a stake ahead of a deal, or holders who want a sale or a new strategy. It must explain the purpose of the stake and any plans. It's due within five business days, and big changes need an amendment.
13G: passive
A 13G is a shorter form for passive holders with no intent to influence control, such as index funds and other institutions. Deadlines depend on the type of investor.
Switching
If a passive holder decides to get active, they have to switch from a 13G to a 13D. That switch is one of the filings activist-watchers look for.
Quick answers
What is the difference between 13D and 13G?
13D is for holders who may seek to influence the company; 13G is for passive holders.
When is a 13D due?
Within five business days of crossing 5%.
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