Home / Research / Restatements (8-K Item 4.02)

Stock returns after restatement and non-reliance notices, 2015-2026

Published 2026-10-19 · updated 2026-10-19 · RedFlagFilings research · 2,605 verified flags from SEC filings, 2015-01-09 to 2026-10-16

2,605verified flags

-23.9%median 1-year return vs SPY

61%trailed SPY over 1 year

-14.5%delisting-adjusted median vs SPY

Summary

Restatements (8-K Item 4.02): across 1,713 flags with a full year of price data (2015-2026), the median stock returned -9.7% and trailed the S&P 500 (SPY) by 23.9 percentage points over the next year; 61% did worse than SPY.
First notice: financial statements can't be relied on: median 1-year return vs SPY -23.9%, 61% trailed SPY (n=1,690).
204 of these stocks stopped trading within a year; counting them at their last trade moves the 1-year median vs SPY from -23.9% to -14.5%.
Nano caps (under $50M at the flag) had a median 1-year return vs SPY of -51.5% (n=471); there are too few large-cap cases for a reliable figure.

Historical averages, not a prediction, a trading strategy or investment advice. Many flagged stocks went up.

What this flag is

An 8-K under Item 4.02 ("non-reliance") tells investors that previously issued financial statements, or the auditor's report on them, should no longer be relied upon because of an error. It usually leads to a restatement of the affected periods.

We separate a company's first notice that its financial statements are wrong from follow-up or repeat filings about a non-reliance already announced and from narrower notices (only the auditor's report withdrawn, or only internal-control conclusions).

Returns after the flag

Group	90 days after the filing						180 days after the filing						1 year after the filing
Group	n	median return	mean return*	median vs SPY	mean vs SPY*	% trailed SPY	n	median return	mean return*	median vs SPY	mean vs SPY*	% trailed SPY	n	median return	mean return*	median vs SPY	mean vs SPY*	% trailed SPY
All restatement / non-reliance notices 2,605 flags	1,959	-0.6%	-7.8%	-6.2%	-9.6%	59%	1,887	-0.5%	-10.9%	-10.4%	-13.8%	59%	1,713	-9.7%	-21.6%	-23.9%	-27.4%	61%
First notice: financial statements can't be relied on 2,566 flags	1,933	-0.6%	-7.8%	-6.1%	-9.6%	59%	1,861	-0.5%	-10.9%	-10.3%	-13.7%	59%	1,690	-10.1%	-21.9%	-23.9%	-27.6%	61%
Follow-up, repeat or narrower notice 39 flags	26	fewer than 30 completed windows					26	fewer than 30 completed windows					23	fewer than 30 completed windows

* Mean = trimmed mean that drops the top and bottom 5% of returns (a few micro-cap returns of +1,000% or more would otherwise dominate). "vs SPY" is the stock's return minus the S&P 500 ETF's return over the same dates, in percentage points.

By year of the filing

Year	Flags	90 days			180 days			1 year
Year	Flags	n	median vs SPY	% trailed	n	median vs SPY	% trailed	n	median vs SPY	% trailed
2015	197	94	-11.0%	71%	93	-19.5%	70%	92	-35.5%	65%
2016	160	85	-3.5%	52%	85	-6.0%	55%	85	-15.0%	61%
2017	131	77	-14.2%	69%	77	-14.0%	73%	76	-26.6%	72%
2018	126	74	-13.4%	72%	74	-24.9%	77%	74	-49.5%	88%
2019	93	54	-14.5%	72%	54	-28.0%	81%	53	-39.0%	79%
2020	89	70	-0.9%	53%	70	-0.5%	50%	69	+16.8%	43%
2021	838	719	-0.8%	51%	694	+0.8%	49%	629	+3.7%	42%
2022	286	236	+2.1%	44%	230	+2.9%	45%	187	-26.2%	65%
2023	236	181	-14.3%	76%	176	-26.6%	74%	166	-63.0%	83%
2024	234	199	-16.1%	71%	193	-25.6%	75%	183	-46.4%	75%
2025	129	116	-12.0%	66%	113	-16.2%	66%	99	-42.9%	74%
2026	86	54	-16.4%	70%	28	too few		0	too few

Recent years have fewer completed windows: a 1-year return needs a full year after the filing.

By company size at the flag

Market cap at the flag	90 days after the filing						180 days after the filing						1 year after the filing
Market cap at the flag	n	median return	mean return*	median vs SPY	mean vs SPY*	% trailed SPY	n	median return	mean return*	median vs SPY	mean vs SPY*	% trailed SPY	n	median return	mean return*	median vs SPY	mean vs SPY*	% trailed SPY
Nano-cap (under $50M) 551 flags	523	-11.3%	-12.5%	-15.7%	-16.1%	69%	496	-20.8%	-17.8%	-26.0%	-24.0%	71%	471	-35.7%	-25.0%	-51.5%	-38.1%	72%
Micro-cap ($50M-300M) 673 flags	644	-0.3%	-5.8%	-3.3%	-6.8%	55%	619	+0.2%	-7.5%	-3.9%	-8.8%	53%	546	+0.5%	-14.2%	-2.3%	-18.0%	51%
Small-cap ($300M-2B) 570 flags	555	-0.3%	-5.9%	-3.8%	-6.8%	54%	540	+0.0%	-7.1%	-4.5%	-8.2%	53%	482	-2.5%	-20.1%	-8.8%	-21.1%	55%
Mid-cap ($2B-10B) 91 flags	90	+0.3%	+0.9%	-5.7%	-3.6%	54%	86	+3.2%	+1.9%	-2.3%	-7.2%	55%	81	+1.6%	-3.8%	-11.6%	-14.9%	63%
Large-cap (over $10B) 24 flags	24	fewer than 30 completed windows					23	fewer than 30 completed windows					22	fewer than 30 completed windows
Market cap unknown at the flag 696 flags	123	-1.2%	-11.5%	-7.6%	-13.0%	67%	123	-19.8%	-22.6%	-25.0%	-25.0%	72%	111	-61.9%	-54.2%	-68.0%	-57.0%	82%

Delisting-adjusted returns

Group	90 days		180 days		1 year
Group	completed windows	delisting-adjusted	completed windows	delisting-adjusted	completed windows	delisting-adjusted
All restatement / non-reliance notices	-6.2%	-6.1% (39 stopped)	-10.4%	-10.1% (78 stopped)	-23.9%	-14.5% (204 stopped)
First notice: financial statements can't be relied on	-6.1%	-6.1% (38 stopped)	-10.3%	-10.1% (77 stopped)	-23.9%	-14.5% (201 stopped)
Follow-up, repeat or narrower notice	n/a	n/a (1 stopped)	n/a	n/a (1 stopped)	n/a	n/a (3 stopped)

Median return vs SPY. The plain figure only counts stocks that still traded at the end of the window. The delisting-adjusted figure also counts stocks that stopped trading first at their last close. Stopping can mean a delisting or bankruptcy, but also an acquisition, merger or going-private deal, and a last close can come before a later loss (for example shares that keep trading over the counter without price data), so the adjustment can move the median either way. Companies that no longer have any ticker are missing from both figures.

The 2021 SPAC wave: 838 of these notices were filed in 2021, 535 of them by companies the SEC classifies as blank checks (industry code 6770). Most were SPACs correcting how they accounted for warrants and redeemable shares after an SEC staff statement that April. Many SPACs later liquidated or merged and stopped trading close to their trust value, which is why counting stocks that stopped trading makes the restatement figures less negative here, unlike for the other flag types.

Notable large-cap cases

Filed	Company	Flag	Market cap at the flag	90 days vs SPY	1 year vs SPY
2020-02-26	CROWN CASTLE INTERNATIONAL CORP (CCI)	Non-reliance / restatement	$68B	+2.4%	-23.6%
2016-01-13	SIMON PROPERTY GROUP INC /DE/ (SPG)	Non-reliance / restatement	$57B	+6.3%	-17.4%
2026-02-27	MONOLITHIC POWER SYSTEMS INC (MPWR)	Non-reliance / restatement	$56B	+28.9%	pending
2025-05-07	AXON ENTERPRISE, INC. (AXON)	Non-reliance / restatement	$47B	+31.4%	-61.5%
2020-02-13	BAXTER INTERNATIONAL INC (BAX)	Non-reliance / restatement	$47B	+9.9%	-31.5%
2024-11-25	Discover Financial Services (DFS)	Non-reliance / restatement	$46B	+7.5%	n/a
2019-05-06	Kraft Heinz Co (KHC)	Non-reliance / restatement	$40B	+0.9%	-5.1%
2021-02-24	PIONEER NATURAL RESOURCES CO (PXD)	Non-reliance / restatement	$32B	-5.8%	+50.0%
2022-01-26	STANLEY BLACK & DECKER, INC. (SWK)	Non-reliance / restatement	$27B	-17.6%	-45.4%
2018-06-28	PPG INDUSTRIES INC (PPG)	Non-reliance / restatement	$26B	-2.6%	+2.0%
2024-11-05	Archer-Daniels-Midland Co (ADM)	Non-reliance / restatement	$25B	-14.0%	-14.5%
2021-03-16	PLUG POWER INC (PLUG)	Non-reliance / restatement	$22B	-41.8%	-59.7%

Every flag in this group where the company was worth at least $10B on the filing date and its stock traded at least $25M a day (one row per company, its latest such flag, largest first). Big companies are rare in this data and are shown for context, not as a sample.

Method and caveats

Data: SEC EDGAR filings since 2015, each verified against the filing text with the same rules as the live site and checked by a separate second-opinion verifier and hand samples; split- and dividend-adjusted daily closes and historical market caps from our market data.
Returns: from the last close before the filing to the first close on or after 90 days, 180 days and 1 year later; "vs SPY" subtracts the S&P 500 ETF's return over the same dates. Groups with fewer than 30 completed windows are not shown.
Survivorship: companies without a traded ticker today are missing entirely, and stocks that stopped trading drop out of the plain figures (see delisting-adjusted). Missing companies are often the ones that failed, so the real outcome for investors was likely worse than these figures.
Overlap and size: companies often file several flags and windows overlap, so these are descriptive statistics, not significance tests. Most flagged companies are micro caps, while SPY is a large-cap index; part of the gap is a size effect.
Errors: classification is automated and errors are possible. Reused tickers, reverse splits and thin trading can distort individual returns; medians limit their effect.
Not investment advice: nothing here is a recommendation to buy or sell any security. Past returns say nothing certain about the future.

Download the numbers on this page: restatements.csv · Chart image: cards/restatements.png · Recent flags of this type: Restatements

More research: All research · 10-year study (all flags) · Going-concern warnings · Late filings (NT 10-K / NT 10-Q) · Auditor changes (8-K Item 4.01)

Frequently asked questions

What happens to a stock after a company says its financial statements can't be relied on?

Restatements (8-K Item 4.02): across 1,713 flags with a full year of price data (2015-2026), the median stock returned -9.7% and trailed the S&P 500 (SPY) by 23.9 percentage points over the next year; 61% did worse than SPY.

Does the type of restatements matter?

First notice: financial statements can't be relied on: median 1-year return vs SPY -23.9%, 61% trailed SPY (n=1,690). 204 of these stocks stopped trading within a year; counting them at their last trade moves the 1-year median vs SPY from -23.9% to -14.5%.

Do delisted stocks change the result?

204 of these stocks stopped trading within a year; counting them at their last trade moves the 1-year median vs SPY from -23.9% to -14.5%.

Does company size matter?

Nano caps (under $50M at the flag) had a median 1-year return vs SPY of -51.5% (n=471); there are too few large-cap cases for a reliable figure.

Is this investment advice?

No. These are historical averages computed from SEC filings and market data. They are not a prediction or a recommendation to buy or sell any security, and many flagged stocks went up.