Why don't boards of directors try to produce results in line with estimates?
First off, some companies do something like this.  Microsoft for example was well-known for consistently hitting earnings estimates every quarter - nearly never missed them, and most of the time didn't exceed by much either.  In order to do this and not be prosecuted for accounting fraud, you typically have to be a service or nontangible good company (like Microsoft used to be) where you can manipulate the amount of product on hand and move costs fairly easily from one quarter to the next.  A company like, say, Home Depot or Caterpillar - both of which have tangible goods they're either retailing or producing - has less flexibility there, although they will still try to move profits around to match earnings estimates more closely. However, you have to be consistently doing well to be able to do this.  You can't manufacture additional total revenue; so if you have one 'down' quarter, you have to either have moved some revenue into it from the previous quarter, or you have to be able to move some into it from the next quarter.  That obviously doesn't work consistently unless you're a fast-growing company, or have an extremely stable base.  It's also hard to do this in a legal-seeming fashion - technically this sort of manipulation is illegal, so decisions have to be justifiable.  Companies (like Microsoft) that are expanding can also do things to encourage slightly lower expectations.  A company in need of a stock price bump issues press releases touting its inventions and products as amazing things that will drive profits through the roof and an aggressive profit forecast - just as easy to issue a press release with a conservative forecast, meaning the bar will be lower to hit.   It's also not really necessary to manipulate earnings to have a consistently well-performing stock.  This article for example shows that companies who miss earnings estimates don't really suffer much (when controlling for their actual earnings changes, of course) in the long run.  Your price might drop a bit, but if your company is otherwise sound, it will recover. Finally, companies do sometimes come out with information ahead of earnings that cause expectations to be lowered.  7-Eleven for example just lowered its earnings expectations due to various reasons.  Some companies choose to do this in order to dilute the effect on the market.  I'm not sure if this is ever required, but it seems to me that some companies are much quicker to restate earnings expectations than others.
**Sundance Resources: Accident**  On 19 June 2010, an airplane crash in the Republic of Congo killed many of the company's executives including the entire board of directors, consisting of the following people: Geoff Wedlock, Non Executive Chairman Don Lewis, Managing Director / Chief Executive Officer Ken Talbot, Non Executive Director Craig Oliver, Non Executive Director John Carr-Gregg, Company Secretary / General Manager Corporate Services John Jones, Non Executive Director Additionally, a further five people were killed in the accident: two pilots, a consultant for Sundance and a British and a French citizen. The company halted its African operations and ordered staff to help find the plane. Trading of its shares was also halted and Peter Canterbury was named acting chief executive. Former chairman George Jones said that the disappearance of the entire board would not spell the end for the company.  ***  ^[ [^PM](https://www.reddit.com/message/compose?to=kittens_from_space) ^| [^Exclude ^me](https://reddit.com/message/compose?to=WikiTextBot&amp;message=Excludeme&amp;subject=Excludeme) ^| [^Exclude ^from ^subreddit](https://np.reddit.com/r/business/about/banned) ^| [^FAQ ^/ ^Information](https://np.reddit.com/r/WikiTextBot/wiki/index) ^| [^Source](https://github.com/kittenswolf/WikiTextBot)   ^] ^Downvote ^to ^remove ^| ^v0.26 Basically, diversifying narrows the spread of possible results, raising  the center of the returns bell-curve by reducing the likelihood of extreme results at either the high or low end.  It's largely a matter of basic statistics. Bet double-or-nothing on a single coin flip, and those are the only possible results, and your odds of a disaster (losing most or all of the money) are 50%. Bet half of it on each of two coin flips, and your odds of losing are reduced to 25% at the cost of reducing your odds of winning to 25%, with 50% odds that you retain your money and can try the game again. Three coins divides the space further; the extremes are reduced to 12.5% each, with the middle being most likely. If that was all there was, this would be a zero-sum game and pure gambling. But the stock market is actually positive-sum, since companies are delivering part of their profits to their stockholder owners. This moves the center of the bell curve up a bit from break-even, historically to about +8%. This is why index funds produce a profit with very little active decision; they treat the variation as mostly random (which seems to work statistically) and just try to capture average results of a (hopefully) slightly above-average bucket of stocks and/or bonds. This approach is boring. It will never double your money overnight. On the other hand, it will never wipe you out overnight. If you have patience and are willing to let compound interest work for you, and trust that most market swings regress to the mean in the long run, it quietly builds your savings while not driving you crazy worrying about it. If all you are looking for is better return than the banks, and you have a reasonable amount of time before you need to pull the funds out, it's one of the more reliably predictable risk/reward trade-off points. You may want to refine this by biasing the mix of what you're holding. The simplest adjustment is how much you keep in each of several major investment categories. Large cap stocks, small cap stocks, bonds, and real estate (in the form of REITs) each have different baseline risk/return curves, and move in different ways in response to news, so maintaining a selected ratio between these buckets and adding the resulting curves together is one simple way to make fairly predictable adjustments to the width (and centerline) of the total bell curve. If you think you can do better than this, go for it. But index funds have been outperforming professionally managed funds (after the management fees are accounted for), and unless you are interested in spending a lot of time researching and playing with your money the odds of your doing much better aren't great unless you're willing to risk doing much worse. For me, boring is good. I want my savings to work for me rather than the other way around, and I don't consider the market at all interesting as a game. Others will feel differently. The person holding the majority of shares can influence the decisions of the company. Even though the shareholder holds majority of the shares,the Board of Directors appointed by the shareholders in the Annual General Meeting will run the company. As said in the characteristics of the company,the owners and the administrators of the company are different. The shareholder holding majority of the shares can influence the business decisions like appointing the auditor,director etc. and any other business decisions(not taken in the ordinary business) that are taken in the Annual General Meeting. Making the company isn't what the fuss is about. Charging yourself 'fees' through that company so that you don't how to pay out the director whose contract is on the *net* of profits is what the fuss is about.  I'm surprised that with millions of dollars on the line they don't sue, setting a precedent for these sham fees for all studios. It is in the interest of private owners, stockholders and boards to ensure long-term viability of companies as well. In the case of stockholders and boards, the current price of the stock has its future earning potential priced into the value of the stock. For example, if Microsoft or Google declared that they were shutting down their big research projects, their stock would tumble. Pharmaceutical and chemical companies also have interest in long term viability. They understand that the projects that they start today will not hit the market for another 10 years. If they go bust, all of that money is wasted. I am not an accountant. However I am an independent contractor.  When making money, it's best to estimate the taxes. Especially as you make more money.  For two reasons: Your estimates will never be spot on, no worries everything will be reconciled when you file your return. I don't think the method falls short, it's the premise that is wrong. If the dividend stream really did grow faster than the cost of capital indefinitely, eventually the company behind the share would become larger than the entire economy. Logically, at some point, the growth must slow down. "For an example of a company that didn't do that, see Google:  https://www.sec.gov/Archives/edgar/data/1652044/000165204417000014/goog10-qq12017.htm  [emphasis added]  &gt;""Adoption of ASC Topic 606, ""Revenue from Contracts with Customers"" On January 1, 2017, we adopted Topic 606 using the **modified retrospective method** applied to those contracts which were not completed as of January 1, 2017. Results for reporting periods beginning after January 1, 2017 are presented under Topic 606, while **prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.** We **recorded a net reduction to opening retained earnings of $15 million as of January 1, 2017 due to the cumulative impact of adopting Topic 606**, with the impact primarily related to our non-advertising revenues. The impact to revenues for the quarter ended March 31, 2017 was an increase of $14 million as a result of applying Topic 606."""