A relatively charitable explanation offered by the team is the executives try to avoid litigation by ensuring that investors don't get too bullish on the company's near-term prospects.
A cynic, however, might suggest that by suppressing the stock price by failing to disclose accurate information about the current quarter, managers are giving themselves the opportunity to acquire shares at a discount to what they would've otherwise paid, once the blackout period is over.
The evidence is with the cynics.
The team found that the relationship between underwhelming-to-negative commentary and forecasts from management (in spite of a real-time corporate sales indicator suggesting robust activity) and a positive return in the period starting a few days after earnings were reported is stronger and more reliable when insiders are purchasing shares during this period. "This implies that insiders understate their private information to purchase undervalued stocks prior to the price increase," they write.
"Unfortunately, we do not see any coherent alternative hypothesis — other than managerial manipulation for personal gain — to explain our particular rejection of the Timely Disclosure Hypothesis," the team concludes.