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Corrections Corporation of America Message Board

  • RetiredPaperman RetiredPaperman May 17, 1999 7:09 PM Flag

    A simple and elegant solution

    Doc, recombine PZN with Opco. The singular reason
    for creating the REIT was to enhance the entity's
    abilities to raise capital. For whatever reasons, and there
    are plenty, it isn't working as planned. That is a
    clear fact, not an opinion.

    Combining the co's
    takes away all the sideline issues that have grown into
    forefront issues. If you had done this when PZN was at 20,
    the stock would have temporarily dropped to 15 then
    climbed back. Now, such a move would most likely be
    greated with a move back to 20. HOT gave up REIT status
    and PAH toughed it out. Look at the comparative
    results. Is that a totally valid comparison to this
    situation? No, but a lesson can still be earned.

    I
    remain convinced that the initial plan made sense but
    things changed, some outside of PZN's control (Investor
    disdain for REITS) and some within PZN's control (The
    "mistake").

    It doesn't matter. That's all water under the
    bridge. Bring the company's back together before there's
    nothing left to merge.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • ahhhh, nostalgia!

      just revisit message
      #1501 from 'way back on 5/18/1999

      (here's the
      same link, but with a _v_e_r_y_ different slant
      now...)

      http://equities.barchart.com/cgi-bin/stocks/expert.exe?sym=pzn&code=0041

    • "that PZN would raise capital at the end of May
      of 400 million by issuing high yield bonds. Have a
      commitment letter for additional one billion. This will fund
      current and new unnamed projects. Won't have to issue any
      more stock except the DRIP's."

      Where is the 400
      million and who do they have a commitment letter for 1
      billion with?

      Semantics aside Crants has not
      delivered! Call it a lie or deception, this guy is full of
      shit.

    • > With 44000 beds and 114,000,000 shares o/s
      2,591 shares buys a >bed. At $11 per
      share*2,591=$28,500.
      >So right now you can pay $28,500 to by a bed that
      will produce
      >revenue of
      (39,000*.2)=$7,900.

      Doc can have one of my $28,500 beds, esp. if it's
      sitting empty just now...but he should make jr. sleep on
      the floor...

    • this stock is a steal. With 44000 beds and
      114,000,000 shares o/s 2,591 shares buys a bed. At $11 per
      share*2,591=$28,500.
      So right now you can pay $28,500 to by a bed that
      will produce
      revenue of (39,000*.2)=$7,900. The
      adm cost was 1.5% in 1st qtr
      of 99 which comes to
      $120 so you net $7,720 on $28,500 thats 27.2%. This
      company will survive and prosper no matter how
      much
      Wall Street dislikes Doc. An they are certainly making
      it difficult at the moment. I don't believe they
      could not have
      gotten the $250 million if they had
      wanted it. I think they decided to wait for better rates
      but took the 100 million because
      they were afraid
      of the reaction if they did raise some money.
      As
      it was the reaction was very bad away. Even at 12%
      if you pay
      $39,000 for a bed the cost is $4,680
      plus adm of 120 for cost of
      $4,800. So $7,800
      revenue less $4,800 expense and you net $3,000.
      You
      have to believe that the revenue is there ot it will
      not work. But noone on this board has said anything
      to convince me
      that there is not demand for
      these beds or that they do not have economic value.

    • To answer your question; I'd make no form of drug
      illegal, although I would leave in place systems to
      protect the underage.

      But I'd let anyone stupid
      enough to kill themselves do so.

      Rather than
      spend a billion dollars in a futile and
      counterproductive effort at interdiction, I'd take the billion and
      buy drugs and give them away. Then I'd film the dead
      bodies and use them for education. Perhaps it'd save a
      few at the margins.

      Prohibition should have
      taught us that you cannot legislate against supplying
      commodities for which there is demand. It only raises the
      price, and makes it worthwhile for criminals to invent
      more effective ways to get around the laws.
      Prohibition CREATED Al Capone, and today's war on drugs have
      created cartels with more power than some governments.
      The price of interdiction is too high, and it is paid
      by all the innocents who want nothing to do with
      drugs.

      In a proper world, people pay the price for making
      bad decisions in their lives. Others do not.

    • You don't have a problem until you try to rob Peter and Paul.

    • Bingo.

    • The debt issue is a short-term fix. I really
      believe they could have gotten much better terms a week
      ago, before the stock went totally into the toilet.
      Maybe they will learn from this. They wound up
      essentially negotiating from weakness, and that
      procrastination is what undermined the stock price, together with
      what Crants described as a vendetta by some parties
      who wanted to see the deal fail (we all know who that
      is, don't we folks?). If they could have done the
      deal without so much fanfare, IMO, they could have
      closed it earlier and on better terms and perhaps the
      whole 300 mil. I don't know what their plan is, but I
      believe they intend to finance the special dividend with
      another trip to the credit trough -- so we can see more
      borrowing, perhaps short-term. My key question (which I did
      not ask) is to what extent the June dividend will be
      from FFO. I agree that they have a major job of
      rebuilding on their hands, and litigation may preoccupy them
      for a while. Need major changes at the top, new
      directors -- though they just got through stuffing the
      board with big names (including a Tennessee banker), so
      I don't know how you pull that off in the short
      term. Transparency at OPCO would help, and I think
      D.R.C. III should try his hand at something else, so Doc
      could put someone at the helm with a big, no bullshit
      reputation. With over 2 mil PZN shares, Doc could step down
      and still be the elder statesman, though his ego may
      get in the way. In short, we ain't out of the woods
      yet, but we (PZN) have bought some time.

    • There is a real credibility issue with
      management. But there is another very fundamental financial
      problem. PACING! The company had a great business model
      but it stressed its balance with overly rapid growth.
      The idea was to finance all that construction with
      equity at a significant premium to book. Surely the
      miscalculation on the payments to OPCO hurt; but they never
      would have arisen had the company grown at a more
      digestible pace. Management should cut the building program
      until it regains credibility. It's not about dividends;
      its about the pace of growth.

    • Why do you waste your time debating with this
      fool about legalizing drugs? He has had nothing
      positive to say about PZN (although at the moment I can't
      think of anything too positive myself). When this stock
      recovers he will be nowhere to be found, and this board
      will go back to being the same lazy old board it was
      before. But I have to tell you, these idiots that come
      out of the woodwork (that by the way, most likely
      don't have the balls to invest either long or short)
      are amazing and exhausting. As for me, I will stay
      the course, believing that over the longer term this
      company will not only survive but thrive. Yeah, maybe the
      dips#@t bankers from tx & tn are right,we might see
      single digits again, but NO WAY IN HELL IS THIS COMPANY
      GOING BANKRUPT!!! If we have to give up the dividends
      and be a growth company again so be it. Anyone here
      remember Ascend Communications? I do, back when I bought
      it at $23 a share.

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