Well, first, they did post profits in Q3. But more importantly, revenues generate cashflow. Realogy has debts to pay — $3B worth — and generating $318m YTD in cashflow to pay those creditors is a good thing for all involved.

As to the “assets” vs. “assets”, you're taking the terms out of context, KathLEEN (hehe, sorry about that). In the first graf, assets are meant in the context of a liquidation proceeding; in the second, it includes the intellectual property, goodwill, etc. that generate cashflow.

Finally, the future looks bright to me because the major reason why Realogy is posting losses is debt service. If you look on the 10-Q, you find that for first 9 months of 2008, Realogy had interest expenses of $468m and posted a loss of ($210m); for first 9 months of 2009, they had $430m in interest expense and ($216m) in losses. It sucks for the shareholders and employees of Realogy, perhaps, since that $430m could have gone to them, but as a going concern, Realogy isn't doing that badly.

It's like the family that overextended on a mortgage, is now underwater, but is still making monthly payments — while skipping meals out, vacations, and a new car. Then the bank comes along and restructures the mortgage so as to prevent them from going into foreclosure, with promises of more restructurings if the husband loses his job. Yeah, I'd say the future looks pretty good.

But that's just me — not saying invest in Realogy securities, but things don't look grim and dire.

-rsh

“Realogy has next to no assets. Really. If you think about their business model, as a franchisor of service businesses, their main assets are the brand names and the people who work at their various company-owned stores or franchisees.”

“They still have major assets in our space.”

So which is it Notorious, they have no assets or they have major assets?

Still not buying into the whole idea that the future looks bright because your creditors get nothing if you fold. If I'm reading your figures correctly, Realogy has something like $3.02 billion in debt? Yes I would say they own the creditors, and they can easily take those creditors down, just like my partner and I took down the bank who made the mistake of lending us too much money.

That doesn't augur well at all and, just to be provocative, I'd say your title borders on disinformation.

Wait…, Kathy? Did you call me KATHY?! That's it: I'm unfollowing you @RobHahn.

Plus, you make it sound like Realogy is just some little brokerage with nothing much going for it. Even in a horrible housing market, these guys did $1.17b in revenues. They still have major assets in our space. That augurs very well indeed.

You know what they say: owe $100K, and the bank owns you. Owe $100m, and you own the bank.

-rsh

How much of corporate America is like this? Holy cow my little debt free, modest profit generating brokerage firm never looked so good to me.

This post was mentioned on Twitter by robhahn: New Notorious: Realogy Dodges a Bullet (Future looks good) http://bit.ly/8L1jph...