Please tell me if I got this right. CCA merged
with PZN and said their intention was to become a
REIT. In order to qualify as a REIT, you must, among
other things, derive most of your earnings from real
estate, and pass on at least 95% of your earnings to your
shareholders. Standard and Poor's says that later this year PZN
will have to spinoff the management part of the
business to a company closely held by CCA and PZN
executives before it can become qualify as a REIT; S&P also
says that this is the profitable segment of the
My question is this: When I read that First Call
estimates earnings of $2.67 a share this year and $3.11
next year, is this based on the company as it
presently is, before becoming a REIT? If I am reading this
correctly, once the management side of PZN gets spun-off,
PZN will loose any revenue derived from it. And most
of the revenue will have to come from leasing the
real estate. I called the company 3 times to find out
the answer and I'm still waiting for the I.R. lady to
call me back. Any insight into this question will be
BTW, this coming weekends edition of Wall Street Week
is going to feature real estate. If I remember
correctly, there will be 3 analysts discussing various
aspects of real estate, which will have to include REITs.
It would be nice if one of the analyst recommended
PZN. It sure would give a nice boost to the stock.
Those First Call estimates are for the company as
it presently is, but it is now a REIT. The
"spin-off" has already happenned. Organizationally and
Operationally, as of 1/1/99 the deal was done. I think the
earnings projections you mentioned are actually FFO (funds
from operations)figures, not earnigs per
The "Management" side of the business has already
been seperated from the Property Ownership side but a
substantial part of the profitability from the "management"
side is essentially being sent back to the REIT.
Therein lies the basis for the argument of whether or not
the IRS will allow the present
Confused? You are not alone and this is in large part why
the stock is at $16 instead of $26.
certainly a better way to explain what I've just said but
those that can say it better have said it so many times
they've just given up.
I have also called the IR lady twice in the last
two days to try and get a better understanding of
this special dividend. No reply yet either. Is this
typical of this company? If it is they need to make some
changes at headquarters.
Jake 1349 summed up the dividend situation as
succinctly as possible in #800.
The reason there is a
special dividend is that the new PZN is treated for tax
and accounting purposes as if it were the old CCA,
having acquired the old PZN.
To be a REIT, new
PZN can't have any of CCA's "earnings and profits".
That's a tax term, but it is essentially retained
earnings. Thus new PZN has to pay out old CCA's retained
earnings by the end of this year in order to be a
You have to be a shareholder of record when the
special dividend is formally declared (as Jake said, .05
per quarter through September, then about 1.85 in
While the gist of your point is understood in
saying (in #824) that:
<<..couple those two
negatives with the fact that PZN is somewhat of a small cap
and you get a stock that has underperformed the big
the generally accepted
capitalization parameters would qualify PZN as a mid-cap company
(MC = to or > $1 billion) rather than a small-cap
(MC < $1 billion). While I've seen differing
opinions as to the upper limit for mid-caps, it seems to
range from a low of $2.5 B to $5 B. I have regarded $5
billion to be the distinction between a mid-cap and a
And based on yesterday's
(4/15/99) close for PZN of 16.8125, Yahoo is finally
(miracle of miracles) showing PZN with a more accurate MC
of $1.901 B. That's still at least 1% shy of the
$1.923 B you'd get using the last known S/O I'm aware of
as of the beginning of April, but it's not as bad as
being 26.37% shy like Yahoo had been up through the end
of last week.
And speaking of the major
It's no news that the large-caps have outperformed the
small and mid caps. But have you noticed what's been
happening thus far this week, since last Friday's (4/09/99)
close? If you hadn't, here's this week's tally (%
change) through yesterday (Thursday,
Goldman Sachs' Abbey Joseph Cohen
was quoted on Wednesday as predicting, henceforth,
broader participation in the bull market by smaller and
mid size companies' stocks. Was her opinion
influenced by what the markets had been doing this week or
is this week's performance characteristic of her
At the time of my posting #842, I was unaware
that HSBC had added an additional 1,556,109 shares to
its holdings last Thursday, 4/15/99. I was informed
of that yesterday.
By the General's
reckoning, S/O now stands at 115,924,218 shares, according
PZN a market capitalization of $2.029 billion which
is almost 2.6% more than the $1.978 billion that
Yahoo is reporting, based on 4/16/99's closing price of
A few years ago, the starting salary for prison
guards in Caif. was 60k a year, and it only went up from
there, and that's not including overtime. It, no doubt,
is higher today. The union for prison guards in
Caif. is one of the highest contributors, if not the
highest contributor, to politicans in the state. Calif.
prison guards have receieved a lot of bad press for
years. Recently it's for incidents such as staging
"gladiator" type battles among the inmates and betting on the
outcomes. If these same prison guards worked for a private
company, they would serve as an example of how privatizing
prisons won't work.
The bottom line is this:
whether a prison is publicly run, or privatly run, the
taxpayers do not want to spend the money that it takes to
run prisons properly. Another example of this is
nursing homes. For several years I inspected nursing
homes as a state employee. I had access to all the
books, and all the costs, and spoke endlessly with
nursing home administrators about operations. I thought
about operating my own nursing home. What stopped me
was that I came to the conclusion that Medicare and
Mediaid just didn't pay enough to operate a nursing home
properly and still make a decent profit. Nothing has
For me it comes down to this: Who do you want to run
your prisons? A bungling, bloated, incompetent
buracracy, or a cost cutting, profit squeezing, poorly
trained private company. the end result is the same -
prisons are run poorly. Private enterprise just does it
cheaper. Yes, I am a shareholder, and I have no ethical
problems owning this stock.
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Help�-�Add�to�My�Yahoo!�-�Sign�Out <Picture>WSW and Warren Buffet
sam_0534 618�of�618WSW was quite favorable to REITS. And
the LA Times noted today that REITS rose for the 7th
day in a row and for the week Morgan Stanley reit
index jumped 8%. Said that purchases in 2 reits by
Warren buffet and management buyout bids for others
spurred optimism that a 15 month slump is ending!!!
Hurray. I could not see any reason for them going down
that was logical to me. It was just crowd physcology
and some problems with the shared reits and isolated
problems IMHO. These yields will get people into them now
People who do not ... uh ... actually own PZN
stock this is an irrelevant question, but considering
the "subject" text I am sure they are not reading
this. Right? Right? Rrriiiggghhhttt.
I have not actually received any dividend in the
mail thus far. Can someone advise as to when we
Postsript: BTW Cleo, I just cannot
fathom why you continue to persevere in attempting to
convince folks that you do not own any PZN stock. First of
all, someone pointed out in an earlier post that you
had in fact once stated that you did own the stock.
Possibly more importantly, to not own any would only put
you in the company of the one other poster (hmm who
could that be) on this illustrious message board who
denies owning any. I mean think about it, what does it
say about someone who has no actual investment in a
stock but spends their time reading all of the posts
and actually replying to some of them. Would not that
be tantamount to stating one had no life. If their
is something wrong with my logic please advise.
Subpostscript: Because if you don't start acting right ... (LOL)
we might make you start posting on the SI board
where one of our prior posters has established (I
guess) some kind of expatriot PZN presence. Gosh ... it
makes me just plain all multiple personalitied out just
thinking about it.
Appended subpostcript: Is this
kind of like the break-up of the Soviet Union? Does
this mean we are required to copy and paste out
postings on this board to the SI board? The implications
are mindboggling to a country boy like me.
I hold my shares in an E-Schwab account and my account was credited with the dividend on the same day as the Pay date, whatever that was. Snail mail is slow but something must be wrong.
When your in Baltimore buy Jerry a beer and wear
a Cal Ripkin T-shirt.
Prison Realty Corp. Reiterated `Buy' at Legg Mason
Princeton, New Jersey, April 16 (Bloomberg Data) -- Prison
Realty Corp. (PZN US) was reiterated ``buy'' by analyst
Jerry L. Doctrow at Legg Mason Wood Walker Inc. The
12-month target price is $26.00 per share
regularly updates his buys to his sales force.