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Non-Tech : Cendant Corporation (NYSE:CD)
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To: Jake0302 who wrote (1024)7/14/1998 9:55:00 PM
From: Filippo Zucchi  Read Replies (2) of 3627
 
The issue you raise just may be CD's saving grace. The operations of the non CUC franchises are independent from Cendant. In other words, if I remember correctly what I read in the 10Q and K, the franchisees have no equity interest in CD. They pay a fee to CD and run the business as their own. That is why I believe CD's core operations (ex- CUC) are as good today as they were on April 14.

Another interesting tid-bit: a Merrill Lynch research note today stated that the theoretical value of the CD's non-CUC businesses is approx. $13, and that the CUC business at this point could not be valued. Analyst thought stock might trade down to the $13 area. As *issed as I am at having my paper net worth decline by $35k in 2 days this is my question. Would I buy a stock that trades just above book value of its core businesses, trades at 10 to 15 times '99 estimates, has about 10% of its stock price in cash and just may have a potentially valuable asset in CUC's business down the line? Even with the mgmt. problem created by W. "&*!*&*)%" (don't be shy about your favorite expletives) Forbes, who I do not believe will last until the end of the year, the answer is yes. In the long run I think good core buinesses will rise to the top. In the short run I hope that ABI decides to revisit its friends at AIG and gets itself away from CD. That will avoid uncessary dilution and allow CD to focus on its current operations until the storm has passed.

For all of us who lost a good chunk of money - relax and smile 'cause the alternatives are not gonna do you any better.
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