RCI to "Vacation Rental Group" in Cendant split

Started by Carolinian, October 27, 2005, 00:55:11

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In the announced plan to divide Cendant into four new companies, RCI is to be placed with the ''Vacation Rental Group''.  If people haven't gotten a clue yet from all of the rental sites where RCI is flogging off our exchange deposits as rentals to the general public, this should be a big red flag to all timesharers that Cendant and its successors is pushing timeshare in a rental direction instead of exchange.

There is some interesting commentary on this subject in the Street Talk column at www.streettalkblog.com/?p=306#  The item entitled ''Oligopoly'' at www.streettalkblog.com/?p=293# is also very enlightening on related matters.


There might be a silver lining to this..namely, the reaction of Wall Street to this.  Cendant stock has been a real turkey for several years and has dropped 20% or so since this announcement, hitting a new low today.  Someone sold a million shares on a downtick right at the closing bell.  

Cendant holders are spending a long night tonight.

If all was fine and good in the Cendant model, they wouldn't be reorganizing it.  Wall Street hates uncertainty, and this is being reflected.  I suspect this reorganization might uncover many rats, some of which will probably result in class-action lawsuits by the Cendant shareholders themselves.  Cendant CEO Silverman commented that for some time now, the value of Cendant shares hasn't reflected the value of the company.  Is that really so?  Or do the big institutional investors suspect that all is not quite right with them?

Faced with the ire of both their customers AND their shareholders, RCI might recognize that ripping people off is ultimately NOT a good long term business model.  Henry Silverman ain't Dick Cheney, and Cendant ain't Halliburton.  Ultimately, they are going to have to play nice or pay the price.

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