Stock Question

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

As part of the spinoff from Cendant, Realogy is buying back shares. In a modified Dutch Auction, shareholders can offer shares at a price between $20 to $23, or designate at the determined price. All shares will be purchased at the same price, the lowest price that produces 32,000,000 shares.

Right now Realogy (H) is trading at $20.

The brokerage says there will be a reorganization fee to participate, but did not say how much.

Any suggestions?

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

Yeah, right, before they start this program, the price was once in 26. They say we will only value our price in that range. Wonder if they will get law suit.

Jya-Ning

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Sure, CD was down before the spinoff, and each of the new companies are lower now than at the time of the spinoff, so, yes, they are buying themselves back at a low price.

So, is your guess that with fewer shares outstanding, the price will go higher after the buy-back?

Oh yeah, in the detailed explanation, a lawsuit is one of the contingencies under which they will not honor this offer.

Yeah, right, before they start this program, the price was once in 26. They say we will only value our price in that range. Wonder if they will get law suit.

Jya-Ning

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

I thought you are not into stock? What will be your outlook of real estate activity? I believe the company get royalty from the real estate brokers and the usage of the company resourse.

As to company buy back stock, a few do that frequently only give it out as big compensation to their header as reward of their work. But before they do that, they show the earning per share before dilute.

So the real question probably is can the sector moving faster than the whole economic or lag.

Jya-Ning

ps. forget you have your crystal ball, maybe you will have better hold on this than I am.

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

RCI seems to be all about making money. If you can't do it as a whole, split into four parts and figure out different ways. If you can't screw the customers, screw the shareholders. Hell, why not screw everybody and make the llegal staff work for their money.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

It is profit that I seem to have a problem with, not stocks.

My crystal ball has been murky lately. I believe the last answer I got was "Hell, I don't know any more!"

My answer is that since all the parts that spun off are lower than when they first did, and the aggregate is lower than the whole before the spinoff, and it was lower than the experts said it should be, and the real estate sector of Cendant was not a problem area for them, then Realogy should be increasing in the future.

I thought you are not into stock?

ps. forget you have your crystal ball, maybe you will have better hold on this than I am.

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

Those seperate entities will each have to prove themslves before the market reacts favorably towards them.

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

Hell, why not screw everybody and make the llegal staff work for their money.

On the other hand, most of the company after spin off will offer a chance for odd-lot owner to sell the stock back to the company, most of the time, it is with no transaction cost, since it is 4 to 1, a lot of people may have 25, 12.5 share, it is a good opportunity to sell them. The price range probably was set based on the close price (which on the day the announce is 21.02). Of course, most companies that buy back does not use this method. With the size (12.7% of all existing share) they want to repurchase, and consider they are in sp500 (so most index funds has to hold them), it probably will involve some instituation player(s) since the insiders claim they will not take part in this. If that is the case, the purchase price probably will not be in $20 but more likely to be in $23. Based on the current price ($20), it may be a good to sell.

By the way, H does not hold RCI, and based on 10k, RCI's profit actually went down. H holds Centry 21 and Coldwell Bank and some moving company.

So, is your guess that with fewer shares outstanding, the price will go higher after the buy-back?

Unless you base the price by supply and demand, then yes, it more likely will be higher if they don't give out those share to the manager as reward of job well done. If you base on momentum, it has no effect (since the momentum is going lower with no support before this, 20 is artificial line set by this offer, so need to see if 20 can hold after this). If you base on value, they have to use their assess to get this potion, so it should not change the value. But I also are not very good at profit , so guess it should be based on your crytal ball, if it thinks the stock price makes no sense at all, it worth to hold. If it thinks real estate market makes no sense at all, it worth to get rid of them.

Nonetheless I guess some of managers should not get the full stock incentive since the reason to split the company is to increase the shareholder's value, at yesterday's price, it is like $14.5 before split, so the job is well done, but unfortunately, it will not achive what they planned.

Jya-Ning

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Some figures.

Before the spinoff, analysts had it underachieving, calling it a $23 value. It was trading at $16-17.

Now the sum of the spinoffs are trading at an equivalent of $12.93.

So it appears to be a good time to buy back shares, except for the shareholders, of course.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

H has continued to rise after the buy-back. The most you could get selling it back was $23 and right now it is at $26.03.

Wyn and CAR have also gone up.

But they still are not doing well. The three spinoffs are now at an equivalent of $14.50.

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

WYN will going to have its 3QT earning call on webcast through their website on Nov 2. Will be interesting. Based on Marriott continue try to expend abroad, the travel business look like will expect some good outlook.

Jya-Ning

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Compared to what I bought Cendant at, here is how the spin-offs are doing:

CAR -28.03%
WYN -14.74%
H -5.50%

H is now at $27.15, up from the $23 maximum buy-back price. If they bought back the 32,000,000 shares they wanted, that's an appreciation of $132,800,000. Not bad for them!

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

WYN 3rd Q

* Revenue increase of 10% compared to the third quarter of 2005, with
strong top-line growth across the Company's three businesses: Lodging,
Vacation Exchange and Rental, and Vacation Ownership

* Strong performance across the lodging brands helped to push RevPAR up
11% and drove franchise fee revenue growth 14% when compared to the
third quarter of 2005

* Growth in the number of exchange members, vacation rental transactions
and average price per rental, helped to fuel a 10% increase in Vacation
Exchange and Rental revenue compared to the third quarter of 2005

* Continued growth of the Vacation Ownership business, with gross vacation
ownership interest ("VOI") sales increases of more than 20% compared to
the third quarter of 2005 driven by increases in tour flow and volume
per guest

Seems like the expect 4thQ will began to slow down

Jya-Ning

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

I can't recall exactly what CD was at at the time of the split, but yesterday the sum of the spinoffs were trading at an equivalent of $14.63.

Now the sum of the spinoffs are trading at an equivalent of $12.93.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Today $15.06, still climbing.