Stress tests · eight adversarial attacks on the headline finding
If the headline result were a real effect, at least one of these would have caught it.
Bottom line. The eight stress tests below are designed to falsify the headline event-study finding by attacking different ways the finding could have been an artifact (sector confounding, estimation-window selection, oil-instrument mis-specification, private — founder-led anomalies, etc.). For EquipmentShare.com specifically, three additional firm-specific stress tests apply: (1) Tornetta-confound separation, (2) post-conversion re-ratification interaction, (3) construction equipment rental (private pre-IPO)-shock isolation. All ten tests are pending the per-firm event-study run.
Eight canonical stress tests (pending per-firm run)
| # | Stress test | Attack vector | Verdict |
|---|---|---|---|
| 1 | Estimation-window sensitivity | Vary pre-window: 60d, 120d, 250d (canonical), 500d. If the headline depends on pre-window length, identification is unstable. | [PENDING] |
| 2 | Oil-instrument sensitivity | Vary BNO substitute: WTI, Brent futures, XLE, no oil instrument. For EquipmentShare.com specifically, oil instrument likely not load-bearing (auto firm). | [PENDING] |
| 3 | Peer-firm sanity check | Day-0 AR for every construction equipment rental (private pre-IPO) peer. If most peers also moved similarly, EquipmentShare.com's AR is a sector signal, not a firm-specific announcement effect. | [PENDING] |
| 4 | Rolling β diagnostic | EquipmentShare.com's β to FF6 factors rolling over the pre-window. Unstable loadings invalidate the constant-β assumption. | [PENDING] |
| 5 | Placebo-in-time | 100 pseudo-event dates from the pre-window. EquipmentShare.com's actual Day-0 AR's rank among the placebo distribution. | [PENDING] |
| 6 | GARCH-corrected [T−10,+0] | Leakage-window inference under GARCH(1,1)-conditional variance. Standard test assumes constant volatility. | [PENDING] |
| 7 | Sector / sub-sector split | For EquipmentShare.com: EV-specific peer subset (Lucid, Rivian, BYD) vs ICE-incumbent peer subset (Ford, GM, Toyota). Sub-sector dispersion test. | [PENDING] |
| 8 | Cross-sectional regression | Day-0 AR regressed on firm-level controls (market cap, β to market, β to sector ETF). EquipmentShare.com's residual against the regression line. | [PENDING] |
EquipmentShare.com-specific stress tests
- Tornetta-confound separation. The January 30, 2024 Chancery ruling rescinding the firm's pre-redomicile compensation package is a within-window confounding event for any analysis using [DATA PENDING] as the canonical event date. The stress test separates Tornetta-driven price movement from redomiciliation-anticipation movement by re-running the Day-0 test with the canonical event date set to [N/A — pre-IPO] (effective date), then comparing the two specifications. [PENDING]
- Post-conversion re-ratification interaction. The [DATA PENDING] annual meeting approved both the redomiciliation AND a re-ratification of the 2018 compensation plan. The stress test tests whether the meeting-day price movement (June 13 / June 14) can be cleanly attributed to one decision or the other. [PENDING]
- Auto-industry-shock isolation. The first half of 2024 included material construction equipment rental (private pre-IPO) events (UAW strike aftermath, EV-subsidy policy changes, China BYD pricing actions, EquipmentShare.com's own delivery-miss announcements). The stress test isolates EquipmentShare.com's AR from contemporaneous construction equipment rental (private pre-IPO) shocks via the sector-ETF residualization on Day-0. [PENDING]
Founder-controller stress test
Standard event-study identification assumes the marginal trader sets price. For EquipmentShare.com, Musk's ~[DATA PENDING — voting %] voting stake may make this assumption non-standard: a private — founder-led could deliver a credible threat to leave the market entirely (take-private, redomicile again), and the marginal trader prices that threat. The stress test compares EquipmentShare.com's announcement-window AR to the AR of (a) other founder-controlled large-caps and (b) other DE→TX movers without private — founder-led status. [PENDING per-firm run]
Primary sources
See /methodology for the canonical inference framework. Per-firm data: /replication. Full Bluebook-format citations in SOURCES.md.