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.
is, I really don't know what I have.
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,
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
I also don't understand why PZN has to issue new
stock, thereby dilluting the shares, in order to raise
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
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
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.
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.
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
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
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
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)
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
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."
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
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.
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
"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
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
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.
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.
CO: Prison Realty
Corporation; Corrections Corporation of America
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
March 19, 1999, Friday CITY EDITION
LENGTH: 257 words
HEADLINE: CCA CLASS-ACTION SUIT
SETTLEMENT AWARDS PLAINTIFF LAWYERS $4.5 MILLION
BYLINE: GETAHN WARD AND KEITH SNIDER STAFF WRITERS AND
in a class-action lawsuit against Corrections
corporation of America were awarded $4.5 million yesterday as
part of a settlement of the case.
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
Chancellor Ellen Hobbs Lyles
awarded a $4 million contingency fee and $480,007 in
Nashville-based Prison Realty's shares
fell yesterday 6 cents to $19.63.
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
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
Why should ANY AMERICAN DIE FOR THE CAUSE OF
And, if we set a precedent, can I
suggest a few more places to bomb:
Basks(sp?); Romania, helping Hungarians; Baltics, helping
minority Russians; Russia, helping Chechens and,
China, helping Tibetans!! No, scratch the last one: they
GAVE US MONEY FOR THE PRESIDENTIAL CAMPAIGN!!
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
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
Of course the structure is on a
fine line and I wish it wasn't..but it is.
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???