whisper number investment & finance definition
Unofficial
corporate earnings estimates that are “whispered” among analysts and their
favored investors who have private information that they had been told by the
company. If the earnings per share amount is below the whisper number, but
above the consensus estimate, the stock sells off, which creates volatility.
However, since the Securities and Exchange Commission passed Regulation Fair
Disclosure in 2000, companies are not supposed to selectively disclose material
information to clients or other investors. That rule, along with the bear
market that followed the Internet boom in the late 1990s, has restricted the
occurrence of whisper numbers.
See whisper number in Wall Street Words
An unofficial estimate of a financial variable (generally, earnings or revenues) that will be reported by a corporation. A whisper number may be different from published estimates by financial analysts or earnings guidance provided by corporate management.
Case Study Whisper numbers frequently proved a major factor in moving stock prices during the stock market boom of the late 1990s. A corporate earnings announcement that met consensus estimates by analysts but fell short of the whisper number often resulted in a major price decline in the price of the firm's stock. Likewise, an earnings announcement that exceeded the whisper number could push a stock price higher. Whisper numbers often originated in Internet chat rooms, where individual investors shared rumored information with fellow investors. These rumors were occasionally believed to have corporate insiders as a source. In particular, investors were searching for companies that were likely to report earnings that were higher or lower than expected by Wall Street analysts. Whisper numbers lost their clout following the 2001 implementation of Regulation Fair Disclose, which prohibited companies from making selective disclosures.
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