Chapter 6
Guiding the Misguided
Why It’s Beneficial to Assist Investors with Forward-Looking Information
In This Chapter
- Quarterly or annual earnings guidance is pervasive, and for good reason.
- Guidance improves transparency, reduces stock volatility, and mitigates the consequences of shareholder litigation, no mean feat.
- Stopping guidance drives analysts away and increases uncertainty about the company.
- Fighting short sellers is a bad idea.
- Guidance in cyberspace.
- When and how to guide investors.
The practice of earnings guidance—managers’ public forecasts of earnings, and often additional performance measures—is a hotly debated issue. Both the reasons and consequences of guidance are contested. This obviously calls for a thorough examination ...
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