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Corrections Corporation of America Message Board

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  • swimmingwithsharks swimmingwithsharks Jun 5, 1999 10:30 AM Flag


    $482 million in current assets. $1,141 million in
    current liabilities of which $620 million is owed to a
    bank credit facility. Those junk bonds are just going
    to pay off some existing loans and they will never
    generate any additional revenue. By the time the tennant
    is paid and the preferred shareholders are paid and
    uncle sam gets his cut that will leave about 22 cents
    for every share currently outstanding. Hence, my
    estimate of an 80 cent dividend.

    To anyone that is
    thinking about buying this stock or has already bought,
    this company is very speculative. Chances are it won't
    go bankrupt but chances are very good that the
    dividend that looks to good to be true will have to be cut
    in order for the company to survive.

    You want
    to call my posts stupid,fine, I don't care. I'm just
    trying to read between the lines and trying to see what
    is going to happen before it happens. I make a lot
    of money buying companies that get shredded by the
    market. I bought ASND at 24, MWL at 8 and VRC at 5 1/2.
    Now, if by some miracle (and I think it will take a
    miracle) the dividend is not cut and is deemed to be safe
    then all those people selling yesterday are going to
    feel pretty stupid for selling and will buy back in to
    lock in that healthy dividend before the price rises
    too much.

    There is just way too much risk to
    be buying here. Management competence is in
    question, the financial strength of the company is also
    questionable and that fat dividend (to me anyway) is in
    serious jeopardy. Fridays action after the drop to nine
    may have been a dead cat bounce. You only have to
    look back a couple weeks on the PZN charts to see what
    I mean.

30.42-0.75(-2.41%)Apr 29 4:02 PMEDT