Dollar Thrifty shares drop sharply on warning - Car Rental News
Dollar Thrifty shares drop sharply on warning
Car Rental News - 25/09/2008
Dollar Thrifty stock fell by 30 percent on Tuesday on a company warning about third quarter results.
The rental car giant has warned that its financial results for the third quarter are likely to be affected negatively by the bankruptcy of one of its travel operators. Although specific details were not provided by the company’s spokesperson, the company did confirm that the travel operator was the U.K.-based XL Leisure Group.
When XL ceased operations a couple of weeks ago, more than 50,000 of its customers were left stranded abroad on while they were on vacation.
During Tuesday afternoon’s trading, Dollar Thrifty stock dropped by 31 percent, down $1.41. Over the past year, shares have lost more than 85 per cent of their value, hitting a low in mid-July when they fell to $2.31.
Christopher Agnew, an analyst with Goldman Sachs, has indicated that the rental car company’s losses relative to its Chrysler vehicles are continuing at levels that are higher than management had anticipated.
The analyst added that two of the most popular destinations in the U.S. for customers of XL travel were California and Florida, which are also two of the most important markets in the U.S. for Dollar Thrifty.