From 1. Friday press release
Companies, who do not want a wide discussion of a report with poor profit performance or just bad news can circulate such a report at that time, when a large number of people don't watch it. One of the common practices of the mid to late 1990s was to send a report after the market closed on Friday., ahead of the weekend. Most of the traders were already going home at this time., and they were not at all up to a deep study of the reports. In addition, investors will no longer be able to quickly get rid of stocks., because trading on the stock exchange is already closed. Another similar method is to release the news that day., when various economic data came out, while everyone's attention was diverted from corporate news.
Certainly, bad news Monday morning is no better. However, the idea is this, what a few days, which will pass from the moment of reading the report to the start of trading on Monday, investors will calm down, and will hold shares.
2. Information masking
To be honest with investors, companies must publish as good, and bad information in your earnings reports. Nevertheless, some companies try to hide bad news, using the language, that hide the real picture.
Such phrases, as "promising", "under pressure", "slip", do not have an unambiguous perception, and hide clearer wording. For example, instead of, to indicate in the report, that the gross profit of the company has decreased due to falling prices, management might just say, that it is "seeing strong price pressure".
Besides, information, which the company publishes very reluctantly, usually posted somewhere near the end of the report. Or bad information is next to positive, to soften the effect. For example, some companies may report new products, or other optimistic news, and then they report that, what investors can expect in terms of profit.
Since the data on the expectation of profit is not the only one in the array of information, and it will be difficult for an ordinary investor to compare the company's forecasts with estimates from other sources, the team benefits from hiding news and distracting the public. Remember, in trading on the stock exchange, it is important to consider many factors, therefore, you must always pay attention.
3. Highlighting beneficial information
Some companies underline those headings and that information in the income statement, which investors want to focus on. This is not done for that, to fool you, but designed for the reader's laziness, on it, what he, seeing the good news, will not go into details. Investors should try to read the entire report, and also look at the predictions, if they are provided. Investors shouldn't stop at headlines like this: "Increase in profit on 30% according to the EPS report for the 3rd quarter ", so as not to forget to read the information between the lines.
4. Increased share buyback
As share buybacks are often positive news for quotes, some boards of directors authorize a buyout, to make your shares more attractive for trading on stock exchanges. However, careful investors may notice, that companies often report such buyouts alongside or in between or immediately after bad news. Such a ransom looks suspicious, and all this can be a tricky trick.
5. Good news obscures bad news
In addition to share buybacks, there are other tricks, which companies do not disdain. For example, announce a new major client, large order, opening a supermarket, the release of a new product along with the release of bad news. The idea is again, to make it appear, it's not all that bad.
Don't let yourself be fooled: reading messages, small print, and hidden news can help you determine the real history of your stocks. Therefore, make it a rule to carefully read the reports..
so, we have covered the most common tricks, however, this does not mean, that companies cannot resort to other tricks. Therefore, investors should always be careful and focused when reading reports., study all facts and predictions. Only in this case can they be sure that, that they didn't hide anything from them, and they have a real idea of their promotions.
