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Sell short after an earnings-delay notice

Sell short Can't File? Short It · Late-filing notices

Selling short: it profits when the stock falls — shares are borrowed to sell and bought back later. It needs a brokerage account approved for short selling (a margin account), and you can lose more than the money you put in.

This sells the stock short, aiming to profit if it falls. The trigger is a company telling the SEC it can't turn in its required earnings report on time (an NT 10-K or NT 10-Q filing) — the first such notice in about a year; a follow-up notice for the next report, or an amendment, is the same trouble already priced in and does not count again. That delay is often an early sign of deeper trouble, like having to redo past numbers or admit accounting problems. It only counts companies trading at or more, since cheaper penny stocks are too hard to actually sell short.

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Sell short after an earnings-delay notice vertical poster. This sells the stock short, aiming to profit if it falls. The trigger is a company telling the SEC it can't turn in its required earnings report on time (an NT 10-K or NT 10-Q filing) — the first such notice in about a year; a follow-up notice for the next report, or an amendment, is the same trouble already priced in and does not count again. That delay is often an early sign of deeper trouble, like having to redo past numbers or admit accounting problems. It only counts companies trading at or more, since cheaper penny stocks are too hard to actually sell short.Sell short after an earnings-delay notice landscape card. This sells the stock short, aiming to profit if it falls. The trigger is a company telling the SEC it can't turn in its required earnings report on time (an NT 10-K or NT 10-Q filing) — the first such notice in about a year; a follow-up notice for the next report, or an amendment, is the same trouble already priced in and does not count again. That delay is often an early sign of deeper trouble, like having to redo past numbers or admit accounting problems. It only counts companies trading at or more, since cheaper penny stocks are too hard to actually sell short.

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Updated Oct 17 · 1 feed behind: Late-filing notices, 1 day · Every feed →

On this page

How the test works

The planned holding period in these tests is 3 months (90 days), from opening to closing an idea.

  1. Sell short when it fires

    Sell borrowed shares at the next trading day’s close after the record posts.

  2. Hold 3 months

    The same hold for every idea, with no target. One exception: in these tests a short is bought back early if the price doubles — a −100% result.

  3. Close it 3 months later

    Buy the shares back 3 months after the sale, on the next available trading close.

Every number on this page uses this sell rule — the other sell rules we tested are under “The full test results and the math” below.

How it did in past tests

Research only — not yet confirmed by new trades

Publication check: Research only

Not passed yet — 5 of 16 checks:

  • Some trades have no price we could check, often at companies that later stopped trading. The range shown counts only the priced ones; counting the rest at a poor result pulls its low end below zero.
  • After trading costs, the range for its average still dips below zero.
  • It needs at least 20 finished trades on 10 separate days after the rule was frozen.
  • Some of those new trades are still open; each has to finish its full hold.
  • Those new trades then have to beat similar stocks after costs, by more than luck across every rule we tried.

Passed — the other 11: Current calculation · Public disclosure dates · Complete finished trades · Every trade compared · Enough separate trading days · Survives without the best year · Survives without the best three stocks · Survives higher costs · Rule frozen before the test · Rules tried alongside it counted · First new signals set aside.

Tested exit: 3-month hold. Historical results alone do not approve a rule for publication. New event tests include an estimated 0.20 percentage point round-trip trading cost, with a 0.50-point stress check.

New trades so far: 0 finished, across — separate days after the rule was frozen.

0 signals set aside across 0 disclosure days; 0 still need complete results. Missing results stay in the count.

Average difference in past tests+3.2 percentage pointsvs selling similar stocks short, over 3 months

Left: did worse · right: did better. Zero matches the comparison. pp = percentage points; the scale adjusts to include the result.

In past tests, selling each stock short made
−0.5%
on average over 3 months · 165 tries
Selling similar stocks short instead returned
−3.7%
the short position did 3.2 percentage points better
Made money in
84 of 165
tries (51%)

165 tries finished the 3-month test · 5 still open · 744 signals ever

Past results don't predict future ones.

Similar stocks means the index fund for each idea's sector — or the S&P 500 when we can't place its sector. (The S&P 500 for 27 of 165 tries here.)

How it did against similar stocks3.2 percentage points better than selling similar stocks short — over 3 months
Paid for borrowing the shares?Yes, about 1.4 percentage points off the average. Every figure above already takes it out. It is our estimate, from how easy each stock was to borrow. Without the fee: 4.6 percentage points better than selling similar stocks short.
Range for the average (95%)−1.1 pp to +7.7 pp vs selling similar stocks short — the range the average probably falls in, not a best-to-worst case
Tested on enough tries?165 tries on 101 separate days ✓ enough
Works in different markets?60% from a single year ✓ spread across years
Spread across many stocks?19% from a single stock ✓ broad
Still works without its biggest winner?+3.8 pp vs selling similar stocks short without RILY ✓ holds up
How we grade →

The 5 newest of 165 finished ideas: 4 of 5 beat selling similar stocks short — one block each, newest first

  1. PKE · Jul 16, 2026 · Return +17.9% · +10.9 pp vs similar-stock shorts
  2. BRUN · May 27, 2026 · Return +36.1% · +34.7 pp vs similar-stock shorts
  3. ALOY · May 18, 2026 · Return −100.0% · −96.8 pp vs similar-stock shorts
  4. DAN · May 13, 2026 · Return +10.6% · +11.3 pp vs similar-stock shorts
  5. RKT · May 13, 2026 · Return −3.8% · +10.0 pp vs similar-stock shorts

did betterdid worseno comparison

PKE · Jul 16, 2026 · Return +17.9% · +10.9 pp vs similar-stock shorts

Inspect all 5 displayed outcomes

pp = percentage points above or below the comparable short-position return.

  1. PKE · Jul 16, 2026 · Return +17.9% · +10.9 pp vs similar-stock shorts
  2. BRUN · May 27, 2026 · Return +36.1% · +34.7 pp vs similar-stock shorts
  3. ALOY · May 18, 2026 · Return −100.0% · −96.8 pp vs similar-stock shorts
  4. DAN · May 13, 2026 · Return +10.6% · +11.3 pp vs similar-stock shorts
  5. RKT · May 13, 2026 · Return −3.8% · +10.0 pp vs similar-stock shorts

Ideas for the week of Oct 12

This week's list isn't set yet — it's set on the first fresh data of the week of Oct 19.

This rule published no ideas for the week of Oct 12.

Every idea

Results under the 3-month hold · 5 still open · 165 finished · each idea's buy-back day is 3 months after it fired · an open idea shows its result so far · a short position’s result is what selling the stock short made.

PKEFinished
Final return
+17.9%
vs similar-stock shorts
+10.9 pp
Dates & source
Fired
Jul 16, 2026
Exit date
Oct 14, 2026
BRUNFinished
Final return
+36.1%
vs similar-stock shorts
+34.7 pp
Dates & source
Fired
May 27, 2026
Exit date
Aug 25, 2026
ALOYFinished
Final return
−100.0%
vs similar-stock shorts
−96.8 pp
Dates & source
Fired
May 18, 2026
Exit date
Jun 18, 2026
DANFinished
Final return
+10.6%
vs similar-stock shorts
+11.3 pp
Dates & source
Fired
May 13, 2026
Exit date
Aug 11, 2026
RKTFinished
Final return
−3.8%
vs similar-stock shorts
+10.0 pp
Dates & source
Fired
May 13, 2026
Exit date
Aug 11, 2026
StockFiredStatusBuy-back dayResultvs similar-stock shorts (pp)
PKEJul 16, 2026FinishedOct 14, 2026+17.9%+10.9 pp
BRUNMay 27, 2026FinishedAug 25, 2026+36.1%+34.7 pp
ALOYMay 18, 2026FinishedJun 18, 2026−100.0%−96.8 pp
DANMay 13, 2026FinishedAug 11, 2026+10.6%+11.3 pp
RKTMay 13, 2026FinishedAug 11, 2026−3.8%+10.0 pp

pp = percentage points: the short-position return minus the comparable short-position return. A dash means the comparison is unavailable.

Showing 5 of 170 ideas

165 more ideas, each with its result
Members see every idea this rule fired, open and finished, under any of the sell rules we tested — and can download them.
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The full test results and the math

pp means percentage points: the difference between two returns. Actual returns are shown in %.

Average result (3 months)
−0.5%
range for the average (95%): −5.4% to +4.1%
Edge over selling similar stocks short
+3.2 pp
range for the average (95%): −1.1 pp to +7.7 pp

Held a year instead (selling short): −10.9% on average (138 tries).

Steadiness (Sharpe ratio) −0.03 — choppy: how even the results were from one try to the next.

Every buy-back rule we tested

Every sell rule we tested, side by side, comes with membership.

Risk and style checks

  • After style factors (market, size, value, momentum…) the edge is +0.4 pp instead of +3.2 pp — the edge is mostly those tilts. Tilts: Size −1.19 · Investment −0.80 · Market −0.64 · R² 0.12.
  • The stocks it picked trade a median $11.9M a day; 0% of its ideas were in thin stocks (under $2M a day).
  • At one percent of that volume a trade is about $119K; with 5 ideas open now, an equal-weight book is about $593K.
  • The edge by market fear on the day it fired (the VIX): calm +9.1 pp (75 tries) · normal −1.4 pp (88 tries) · stressed −17.6 pp (2 tries).

How we test and grade every rule →