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Corrections Corporation of America Message Board

  • GenJackripper GenJackripper Feb 4, 1999 4:50 PM Flag

    HSBC made no purchases of PZN shares las

    Contrary to the impression "Doc" Crants had given
    during last November's Road Show, HSBC's "$50 million
    per month" investment infusion of capital for PZN
    shares from its shelf registration did not commence, as
    we were led to believe it would, beginning in FY99
    (and extending through FY00).

    There are, I was
    informed, two reasons for this.

    The first is that
    the shelf registration under which HSBC had been been
    making purchases of CCA shares (supposedly in the
    amounts of $7 million during September, and $13 million
    in each of the last 3 months of FY98) needed to be
    transferred to Prison Realty Corp. (PZN) on completion of the
    merger and approval of such from the SEC did not
    materialize until 1/15/99.
    The second reason, I learned,
    is that PZN apparently has the flexability to
    exercise some control over when (pricewise) it will sell
    shares to the the bank and why sell shares at currently
    depressed prices when that would tend to exacerbate the
    matter of earnings dilution?

    While, last
    November, Doc had told of an investment of $600 million by
    HSBC in each of FYs '99 and '00, the talk now is $80
    to $90 million in 1Q99. I was left with the
    impression that potential dilution due to 'low' share price
    is governing this revised investment

    Be that as it may, in my quest to maintain
    statistical validity despite Market Guide's (MG) continuing
    to furnish BAD information to us here via Yahoo
    (don't even look at what they've done to PZN's Profile
    page), for those who even give a rat's --- about
    numbers, the following data might warm the cockles of your

    Prison Realty Corp. began its new "merged" existence
    with a total of 105,272,182 (Basic) shares outstanding
    (S/O). This number was derived as follows:

    S/O a/o 12/31/98 = 91,379,203* x 0.875 =

    PZN S/O a/o 12/31/98 = 25,315,380.

    + 25,315,380 = 105,272,182 S/O

    * Note: The
    S/O currently being shown by Yahoo on PZN's Profile
    page is 84.2M. This rounded-off figure is the one you
    would've backed into had you taken the market-cap (MC)
    that MG had been providing to Yahoo FOR CCA over the
    course of CCA's last 5 weeks of existence as a public
    company, and divided it by the applicable share price. The
    fact that CCA ended up '98 with 91.4M S/O rather than
    the 84.2M that MG had been carrying since
    Thanksgiving week apparently couldn't matter less to MG. If
    your S/O multiplier is wrong, your MC's going to be
    commensurately wrong, too (as can be readily seen from PZN's
    Detail Quote on Yahoo).

    To be concluded in Part

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    • PZN's S/O a/o 1/31/99 was 105,273,593, a gain of
      1,411 shares for the month of January (due to employee
      stock purchase program buys).

      If someone lurking
      who has listened to the 4Q98/FY98 CC heard Bob Crants
      answering Ann Anderson's question re: current S/O, tell
      her, "About 109 million.", he was talkin' S/O
      (Diluted) [for analysts' model constructing purposes] while
      we've been talkin' S/O (Basic).

      On the basis of
      105,273,593 S/O, PZN's MC a/o its close today of 21.5625 =
      2.270B and its ADV averaged over the 23 trading days of
      its merged existence thus far, is 514,265.

      month has now passed since the merger and, as was
      forewarned here, MG has yet to report PZN's MC or ADV
      correctly. I have brought this situation to the attention of
      PZN's management with the hope that, periodically,
      someone over there could let MG know what S/O figure they
      should be using as well as correcting up the data errors
      on PZN's Profile page (Bob Crants' ego must love no
      longer even being shown on the page while CCA's
      officer's are shown instead of PZN's).

      I don't know
      how much more time MG needs to get its act together
      but its entirely possible that we might be hearing
      and reading about some Lifer, convicted of multiple
      capital offenses, who simply walked out of a PZN facility
      dressed in the somewhat moth eaten uniform of an Air
      Force General. When they recapture him a short time
      thereafter, they find him in possession of a bus ticket and
      the directions to the address of MG's executive

      • 2 Replies to GenJackripper
      • This seems to be a bi-monthly event at CCA-run
        facilities. No wonder the stock price is so low; the discount
        rate on future cashflows must include a considerable
        amount of risk.

        Published by
        Monday, 2/1/99


        Another escape
        embarrasses prison system

        By Jim East / Staff Writer

        Tennessee's beleaguered prison system took a double hit over
        the weekend as
        a colorful convicted murderer
        escaped from the South Central Correctional
        Center and
        a guard there was charged with helping

        The Saturday escape of David Britt was the fifth
        since October at the Wayne
        County prison, which is
        managed by Corrections Corporation of America. It
        in Clifton, about 100 miles southwest of

        Britt escaped by dressing as a guard and getting a
        correctional officer to
        escort him from the building during
        shift change, officials with the
        Tennessee Bureau of
        Investigation said.

        Britt, 25, remained at large last
        night and is believed to have left the

        Christine McClain, a SCCC guard, has been charged with
        facilitating the
        escape and was being held last night
        without bond.

        "The best we can get is that she
        felt sympathy for the prisoner," said Mark
        Gwyn, a
        TBI spokesman.

        McClain, 41, is in the Wayne
        County jail.

        Britt, considered armed and
        dangerous, is described as a white male; 5 feet,
        8 inches
        tall; and weighing 190 pounds.

        Guards at the
        correctional center discovered Britt's disappearance during
        head count about 4 p.m. Saturday at the prison,
        Tennessee Department of
        Correction spokeswoman Pam
        Hobbins said.

        "They're looking for something to
        substantiate what his next step might be
        and then to move
        there," Hobbins said of investigators.

        The escape
        couldn't have come at a worse time for the Wayne County

        In October, four inmates escaped by squeezing
        through a small opening cut in
        a fence during their
        recreation period. All were later recaptured, the
        one in San Fernando, Calif.

        Last Thursday,
        David Dwight Walker, a former unit supervisor at the
        was arraigned on three counts of introducing
        contraband into a prison as a
        result of the investigation
        into the October escape. Walker was indicted
        those charges in October by the Wayne County Grand

        This guy has since been re-captured, but the company
        can't continue to win business if it doesn't improve
        its business practices.

      • thank you for the very informative material; and it only took 2 posts to supply the above!! Great prose! Michener is probably turning in his grave!!

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