Whisper Numbers

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This refers to the anticipated, unofficial and unpublished Earnings Per Share (EPS) forecast for a public company. It can also refer to a company’s future earnings or revenues.

This, however, should not be confused with consensus estimate. Individuals come up with a whisper number using their own analysis of the company financials, market trends and gut feeling (insider information). To create a whisper number, an entity (usually a website, an investment bank or a brokerage firm) polls investors and analysts about what they really think a particular company’s EPS are going to be for the next quarter or a year. These numbers affect volatility in the market (indicated by VIX) and cause the stock prices to jump and fall irrationally. Some investors are able to take advantage while some collapse to herd mentality behaviour. Examples: Kwality Ltd. and Satyam Scnadal. Think twice before investing as this is nothing but the world of finance playing Chinese whisper !

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