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From Investopedia:

Many companies issue disclaimers when they issue forward-looking statements. Despite an implicit understanding that certain statements are largely speculative in nature, the U.S. Securities and Exchange Commission (SEC) mandates public companies include this disclaimer on all published management materials geared toward investors. This requirement emphasizes that stockholders generally may not take legal action against company management for forward-looking statements that prove to be inaccurate.

From my understanding, they can say whatever they want in the forward guidance since they are legally protected anyway?

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    1. stockholders generally may not is not the same as stockholders may never - likely there are exceptions for cases like this 2. fraud (or insider trading, or both, or whatever other crimes this may or may not involve - IANAL) is typically handled as a criminal prosecution by the government, not civil action by shareholders – yoozer8 Aug 1 '19 at 16:05
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    It's important to point out that there is a significant difference between being protected when you take a well-intentioned guess at the future and you're wrong, vs deliberately taking a guess that you know/feel is wrong in order to mislead others (and being liable). – dwizum Aug 1 '19 at 16:09
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    "Saying what they want" is always a bit different than "intentionally and knowingly making false statements for the purposes of monetary advantage and manipulation of a regulated security". As soon as someone in power is at risk of losing money, the wheels of justice have a tendency to spin up pretty quickly and remain spinning for a remarkably long time. At the same time, part of the point of the advisory is to politely point out that "forward-looking statements" are mostly BS and you should not assume they are more than a deep, vaguely twisted ballpark of a guess. Don't bank on them. – BrianH Aug 1 '19 at 17:17
  • What would be the point of the company doing this? It would simply take money away from one group of shareholders (the ones who then sell at the artificially deflated price) and give it to another group of shareholders (the ones who keep their shares). There’s nothing in it for the company or its senior management other than the possibility of jail sentences if they get caught. – Mike Scott Aug 1 '19 at 20:29
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    @Nico A company can’t control itself or vote any shares that it holds in treasury. Buying shares back is simply increasing the control the other shareholders have. – Mike Scott Aug 2 '19 at 5:16
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The Securities Exchange Act of 1934 formed the SEC and granted it the power to oversee all securities as well as the markets, the conduct of brokers, dealers, and investment advisers as well as the financial reports required of publicly traded companies.

More specific to your question, its anti-fraud provisions prohibit misstatements or omissions in an earnings announcement and all related information such as the earnings conference call.

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    I think it's not so much the fact that the SEC prohibits things, it's that they put people in jail for it. – gnasher729 Aug 1 '19 at 18:32
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This is not that simple. A company's share price is not just based upon guidance, but credibility on accuracy. The market experts then classify it as conservative, aggressive or unreliable. If conservative, they would add expectations... I.e. there are cases when company gave a conservative guidance, market added more and share price went up. When results were declared above guidance, even then the stock tanked, because it was less than market expectations....

An unreliable company will always underperform... as markets don't trust.

So to game the system it would really take long time... May not achieve the goal of market believing it and share price tanking... May not recover back after buy back... A artificial low price if achieved can also expose the company to hostile take overs... There are enough predators to get a good company for cheap.

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"From my understanding, they can say whatever they want in the forward guidance since they are legally protected anyway?"

That is totally incorrect.

  1. they have to add the fine print you mention, which is no big deal, a trivial issue

but

  1. there is a huge body of law and regulations regarding what they can and can't say

The answer to your question is very simply: "you're right, it's highly regulated."

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