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Winning Investors Over: Surprising Truths About Honesty, Earnings Guidance, and Other Ways to Boost Your Stock Price by Baruch Lev

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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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