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Corrections Corporation of America Message Board

  • wile_e99 wile_e99 Mar 27, 1999 11:01 AM Flag

    Well, if misery likes company, I'll be w

    I have watched PZN for quite a while, and have
    been informed somewhat by flipper, when I have
    understood enough to ask questions. I finally bought my
    first round of PZN stock this week.

    The problem
    is, I really don't know what I have.

    Warren
    Buffett says he won't buy a stock he doesn't understand.
    Neither will many investors. Neither will I, usually. I
    bought PZN, but I don't understand any more than a
    neophite would, attending his first football game. You
    watch for a while, and want to get into the flow,
    but....

    For example, I don't understand who HSBC is. I
    understand that they are buying shares of PZN stock, but
    why? Why do we sell it to them? What is their hold on
    PZN?

    I also don't understand why PZN has to issue new
    stock, thereby dilluting the shares, in order to raise
    capital.

    Next, even with contracts as security,
    why would the securitization not be dangerous to
    depend on? FP saw the securitization market vanish, and
    it has gone from a $56 stock to a 60 cent stock, as
    a result. Why wouldn't the securitized leases
    produce enough money to use as a downpayment on a loan to
    build another prison? Are mortgage loans not being
    used?

    There are so many questions when I read
    the messages on this board that I would ask that
    someone write a complete, objective, multi-part
    explanation of the whold story, and post it
    here.

    Maybe this can't be done, but until the picture gets
    easier to understand, there won't be a lot of new
    investors, and the price will stay down.

    Most
    companies do not respond to investor concerns expressed on
    stock boards. When people complain because the company
    is not releasing information, it usually doesn't get
    results. On the other hand, because this puppy is SO
    damned difficult to comprehend, maybe the COMPANY should
    prepare the explanation.

    Wile E.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • There is an informative website for investors
      (www.nordby.com) which provides very short capsule summaries of
      all available brokers' reports on any stock you are
      interested in. The most recent posting on PZN was as
      follows:

      3/26/99: Paine Webber "reiterates
      attractive, hold unexpected conference call, expect bounce".

    • Welcome to the legion of "longs." The questions
      you ask are understandable and reasonable ones and I
      could take a stab at
      answering most of them if I had
      the time to write <<a complete, objective,
      multi-part explanation of the whole (sp) story, and post it
      here>>, which I don't.

      The only reason I could
      give it a shot is because I was in attendance at one
      of Doc's Road Show presentations last
      fall.

      The best suggestion I can give you (since we no
      longer have the infinitely more qualified-to-answer
      likes of Anderson1_98 or LT posting here) is for you to
      do yourself a BIG favor and GO TO THE
      SOURCE.

      I suspect Peggy Wilson Lawrence could answer your
      questions. I believe Peggy accompanied Doc on the Road Show.
      Peggy was then CCA's VP, Investor Relations. Since the
      merger, Peggy has taken over those resposibilities at PZN
      because CCA is no longer a public company requiring an IR
      department. Peggy is a CFA and has been through Doc's
      presentation enough times that she should be able to recite it
      in her sleep. PZN's toll-free number is: (888)
      350-7348.

      My other suggested alternatives to Peggy, who should
      also be able to respond to any questions you might
      have, are back over at CCA, also toll-free @ (800)
      624-2931. They would be Doc, himself, or CCA's CFO, Darrell
      K. Massengale.

      No doubt, Robert Crants @ PZN
      knows the story well, too, but I'd try the
      aforementioned first. I'm certain that, should you connect with
      any of the aforementioned, your time (on the
      company's dime) will be well rewarded.

      I could also
      tell you the names of the women most likely to answer
      the respective switchboards or the respective admin.
      asst. for the individuals named, but today being a
      Sunday, I'd rather not "amaze or amuse."

      Also,
      with only about 12 weeks' worth of shopping days left,
      if you should happen to get ahold of Doc to answer
      your questions, would you please add one more to the
      list?

      Would you ask him what he'd like for
      Father's Day? MK would like to know.

    • Prison Realty to Construct 1,524 Bed Facility in
      Stewart County, Georgia

      NASHVILLE, Tenn., March 29
      /PRNewswire/ -- Prison Realty Corporation ("Prison Realty" or
      the "Company") (NYSE: PZN), a Maryland corporation,
      today announced that it will build a 1,524 bed, medium
      security prison in Stewart County, Georgia. The prison's
      construction cost is estimated at $45 million.

      (Photo:
      http://www.newscom.com/cgi-bin/prnh/19981120/CHF004 )

      Upon its completion in July 2000, the
      prison, located in Lumpkin, is expected to house county
      and state inmates from within Georgia. It will be
      leased by Prison Realty's primary tenant, Corrections
      Corporation of America ("CCA"), which will receive
      approximately $23 million in annual revenues from its
      operation.

      "We are pleased to expand our presence in Georgia by
      committing to the construction of our fourth facility
      there," said Prison Realty Chairman and CEO Doctor R.
      Crants. "We strive to anticipate the needs of our
      customers and position ourselves to provide first quality
      bed space on a continuing basis. Our recent
      expansions at the new Coffee and Wheeler County prisons are
      indicative of Georgia's pressing need for secure beds. We
      believe this facility will also address that need, and we
      are proud to be part of Georgia's
      solution."

      CCA, along with two other management companies
      operating under the name of Corrections Corporation of
      America, provides management services to governments under
      contracts for 81 correctional and detention facilities with
      a total design capacity of 70,121 beds, of which 70
      facilities with a total design capacity of 51,223 beds are
      in operation.

      Prison Realty's business is the
      ownership of correctional and detention facilities. The
      company provides financing, design, construction and
      renovation of new and existing jails and prisons that it
      leases to both private and governmental managers. Prison
      Realty currently owns 48 correctional and detention
      facilities in 17 states, the District of Columbia and the
      United Kingdom having a total design capacity in excess
      of 46,000 beds, of which ten new facilities are
      under construction. Prison Realty Corporation is based
      in Nashville, Tennessee and plans to qualify as a
      real estate investment trust under the Internal
      Revenue Code. Doctor R. Crants serves as Chairman and CEO
      of both the Company and CCA.

      This press
      release contains forward-looking statements that involve
      various risks and uncertainties. Actual results could
      differ materially from those contained in these
      forward-looking statements due to certain factors. These and
      other risks and uncertainties are detailed in the
      Company's reports filed with the SEC.

      SOURCE Prison
      Realty Corporation

      CO: Prison Realty
      Corporation; Corrections Corporation of America

      ST:
      Tennessee, Georgia

      IN: CST

      SU:

      03/29/99
      07:49 EST http://www.prnewswire.com

    • Doc didn't get where he is making poor
      investments or bad risks with his money or anyones for that
      matter---if your not a BIG DOG YOU CAN!T STAY ON THE PORCH.
      All those big time in the know everything about
      prison mgt. won!t find that on a spread sheet!

    • Copyright 1999 The Tennessean
      The
      Tennessean

      March 19, 1999, Friday CITY EDITION

      SECTION:
      BUSINESS,

      Pg. 4E,

      TENNESSEE STOCK


      LENGTH: 257 words

      HEADLINE: CCA CLASS-ACTION SUIT
      SETTLEMENT AWARDS PLAINTIFF LAWYERS $4.5 MILLION


      BYLINE: GETAHN WARD AND KEITH SNIDER STAFF WRITERS AND
      BLOOMBERG NEWS

      BODY:

      Plaintiff attorneys
      in a class-action lawsuit against Corrections
      corporation of America were awarded $4.5 million yesterday as
      part of a settlement of the case.

      The lawyers
      represented CCA shareholders who sued last April, over the
      structure of a deal under which the company was acquired by
      Prison Realty Corp.

      The case was settled in
      December when CCA, now part of Prison Realty, agreed to
      make certain adjustments to the transaction.


      Plaintiff attorneys, including Barrett, Johnston & Parsley
      of Nashville, sought a $9.5 million contingency fee,
      according to an order filed yesterday in Davidson County
      Chancery Court.

      Chancellor Ellen Hobbs Lyles
      awarded a $4 million contingency fee and $480,007 in
      expenses.

      Nashville-based Prison Realty's shares
      fell yesterday 6 cents to $19.63.

    • you never did let me know what facilities you worked.

    • Serious problem, IMHO, is that the intelligence
      community made a grevious error in not realizing that
      Milosovich was not going to "punt" just because we dropped a
      few bombs and killed a few Christians; as these
      particular Christians view martyrdom much as the muslems do
      in other venues. Another problem is that we look
      particularly bad given the (probably also unforseen) letters
      for us to "cease and desist), so to speak, written to
      Clinton by our own Catholic Bishops and Cardinals. The
      bottom line is that we had better get outta there. The
      fact that we see ourselves as being "good guys" does
      not matter when much of the rest of the world
      perceives us as just being the meddlers and imperialists
      that they always thought we were anyway. The liberal
      tree-hugging demos in our otherwise fair land may just get
      more than they bargained for. Hell ... the average
      American still doesn't even know that Kosovo is not the
      name of a rock star, so I really don't believe they
      are prepared to have their sons and even daughters
      die in the streets of Pristina (and no they also
      don't know that that is the provincial capital of
      Kosovo). By the way, the Serbian armed forces number
      200.000 (if you include the heavily armed police). They
      are ready to die for what they believe ... are we?

    • Nice analysis, Flipper. However, I don't really
      understand all the financial details of the Prison Realty
      trust/CC merger, just that PZN intends to qualify as a
      REIT. I own REITs in part because of the favorable
      dividend tax treatment, as well as the fact that you get a
      dividend, something the S&P500 and Nasdaq 100 stocks lack.
      And prison demand greatly exceeds prison supply in
      this case.

    • As always, very thoughtful analysis of the
      situation in Kosovo?
      I only wish, you were as rational
      in your investment decisions and votes, as well!!
      The funny thing is, not only Demos have become hawks,
      but, that their leader in this "BATTLE" IS A CONNIVING
      DRAFT-DODGER! In fact, he, during his six years of presidency,
      droped more bombs than any other US president in peace
      times. Talking about the world, standing on its
      head!
      Why should ANY AMERICAN DIE FOR THE CAUSE OF
      INDEPENDENT KOSOVO?!
      And, if we set a precedent, can I
      suggest a few more places to bomb:
      Spain, helping
      Basks(sp?); Romania, helping Hungarians; Baltics, helping
      minority Russians; Russia, helping Chechens and,
      finally,
      China, helping Tibetans!! No, scratch the last one: they
      GAVE US MONEY FOR THE PRESIDENTIAL CAMPAIGN!!
      P.S.
      Where did MK disappear??!!

    • But why would you know more about a IRS opinion
      than 3 large Accounting firms? Not to mention all the
      Brokerage firms and their REIT departments that put Strong
      Buys on this stock. Even Value Line, Fidelity, etc.
      that are not in the Investment Banking business.


      Anyway who knows....it might be the best thing for the
      stock. To bad though..I could get use to the
      dividend.

      Also PZN has not even filed it's tax return yet.


      I certainly don't mind being wrong...I am many
      times. I'm taking the facts as described to me. I'm not
      a REIT tax attorney. I do understand your arguement
      about the definition of rental streams and you could
      right if the IRS wants to go to the mat on this. But
      doesn't the IRS have to prove that CCA private Opco and
      PZN are substantial the same?? This is me is the
      whole key to the structure. Since we know PZN does not
      have enough cross ownership to be substantial the same
      then the IRS would have to prove on circumstantial
      grounds, it appears to me. And I wouldn't think the IRS
      would want to go to court with just that. But
      maybe..who knows.

      Of course the structure is on a
      fine line and I wish it wasn't..but it is.

      What
      do you do????
      I assume by your previous
      discussions your learning like we all all. Cut the attitute
      please and we all might have a constructive discussion.
      I own a lot of this stock so of course I want to
      see things coming at me.


      Speaking of a
      little humility....maybe you might be wrong???

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