Cendant stock down 10 percent on rumor

By Robert Burgess
Bloomberg News

NEW YORK — Cendant Corp. shares fell 10 percent after analysts at Credit Suisse First Boston and Lehman Brothers told clients the Wall Street Journal may be preparing an article critical of the company's accounting.

Cendant, which franchises Days Inn hotels, Coldwell Banker residential brokerages and owns the Avis rental car business, is "not aware of any impending negative news media story," said Elliot Bloom, a company spokesman. Cendant's shares fell $1.83 to $16.52. About 53.7 million Cendant shares traded, more than six times the three-month daily average.

The decline in the New York-based company's shares reflects heightened shareholder concerns about the accounting of companies with wide-ranging operations after the bankruptcy of energy trader Enron Corp., investors said.

"This is typical of the times," said Thomas McIntyre, a portfolio manager with Dessauer & McIntyre Asset Management, which owned 1.4 million Cendant shares as of the end of September. "Investors are shooting first and asking questions later."

Credit Suisse First Boston told clients the Journal was working on a story related to Cendant's accounting, analysts and investors said. A Lehman Brothers analyst followed yesterday with a note to clients saying he talked to the paper about an article, said McIntyre.

A Wall Street Journal spokesman said the paper doesn't discuss stories it may or may not be working on. Bloom wouldn't comment on whether Cendant, which last year purchased Honolulu-based Cheap Tickets Inc., has been contacted by the Journal for an article.