KEEP IT SIMPLE, CENDANT

摘要

Cendant Corp. Chairman and CEO Henry R. Silverman recently got a rude reminder that investors hate surprises. On Sept. 25, Cendant, the New York-based travel, real estate, and financial-services concern, announced that its mortgage-servicing unit was taking an aftertax charge of $175 million, gutting third-quarter earnings. Why? Thanks to the current refinancing wave, many of the mortgages on which Cendant collects servicing fees have been prepaid, forcing the costly write-down. The market's response wasn't long in coming: By day's end, Cendant's stock plunged 13%, to $11.25. But nasty surprises aren't the only thing dragging down Cendant, which traded at around $20 in December. After a year of corporate and accounting scandals, investors have also turned bearish on companies such as Cendant―a deal-driven conglomerate with a complex web of businesses whose individual performance is difficult to assess. "The market doesn't like ac-quisition-a-day companies anymore," says Gregory L. Jackson, portfolio manager at Harris Associates LP, which held 14.3 million Cendant shares as of mid-year. "People are craving simplicity."