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A company can ensure that its proforma earnings statements have a strong impact on stock prices by prominently displaying them in the headline or first paragraph of the company's news release. Research shows that this placement has a much stronger impact on stock prices than proforma earnings reported elsewhere in the document.
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In his article for Harvard Business Review, Baruch Lev – the Philip Bardes Professor of Accounting and Finance at the Stern School of Business in NYU, talks about proforma as one of the ways in which managers can impart useful information to investors. (For more like this, check out our book summary). Lev stresses that "research shows that proforma earnings statements prominently displayed in the headline or first paragraph of a company's news release have a much stronger impact on stock prices than proforma earnings reported elsewhere in the document."
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