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Non-Tech : Cendant Corporation (NYSE:CD) -- Ignore unavailable to you. Want to Upgrade?

To: VALUESPEC who wrote (537)	5/8/1998 12:39:00 PM
From: Apakhabar	Read Replies (2) \| Respond to of 3627

Several posters have offered their opinion that CD has a limited downside risk of about three or four points (to 20). I disagree, and not on the basis of an overall market crash. If the audit turns up more irregularities, no matter how benign, the stock could easily be punished down to fifteen or sixteen dollars. That may again be an over-reaction (as 18 and change seems to have been this time) but in a high market such as we have these days, companies with the slightest of problems get whacked. I agree with Rory that the picture will be much clearer when the audit is completed, and at that time, if the report looks good for CD, the risk-reward ratio will really be in the buyer's favor. Sure, you might miss three or four points by then. Better than losing eight. And if the audit is clean, CD is a strong bet to double within a year (high forties). If you wait and buy, even at 28 or 30, you won't, IMO, be unhappy.

To: VALUESPEC who wrote (537)	5/8/1998 1:05:00 PM
From: Frank	Read Replies (1) \| Respond to of 3627

VALUESPEC, 1. 67/61 = 10% difference in tender vs. mkt price. It should be treated as an option. 2. FOMC meeting May 19, 1998, and potential rise in interest rates, indicates that the 10% amount should be discounted down by about 2% given mkt risk conditions, correction, etc. 3. CD accounting irregularities reflecting drop in price and potential for non consumation of deal, account for 3 to 5%, lets say 5% for kibbles and bits. 4. This yields a 3% actual difference between tender vs. mkt price. 3% for arbitraguers is below requirements for purchase. In the past I required at least a 5% opportunity before investing in similar opportunities. 6. CD stated that stock price will not be effected until 10 days prior to close. If you believe the deal will be consumated, then a purchase of ABI is justified roughly June 17 or just before. This is the date you will see significant movement in ABI. Abak, Why is the downside limited? To believe that the irregularities are more extensive is to believe that Silverman is lying. Here is a man who has seen his stock halved in a day. If he were going to make any further statements, don't you feel he'd be a bit cautious in his sentiments. Its not going to happen. That's why there is opportunity here. I admit this is all psychology and opinion, but look at it from a personal perspective. Don't you feel he knows exactly what the number is today and that what they are discussing is working through the recommendations to effect policy change within the company. AA is saying, "You've got to put these controls in place," Silverman is saying, "BS, this is limited and should be treated as such." AA is threatening not signing. Silverman is saying, "You can't threaten me, because I'll call someone else in and say you screwed up the forensic review." AA threatens and counter threatens, blah, blah, blah. When the information becomes public, you won't have time to buy.