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Corrections Corporation of America Message Board

  • onictock onictock Jun 15, 1999 5:17 AM Flag

    magic five

    What is it about the number 5? Every shorter on
    every board for every beaten down stock I've ever seen
    always predicts 5! Guess it's kind of hard to say 0, and
    1 or 2 is nearly as absurd. So they say 5. So far
    not a single one of those stocks I watched go through
    a debacle has gotten anywhere close to 5. It's the
    magic short number for sure - and that tells us it's a
    prediction based on not much more than hot air.

    worst one of recent memory (just offhand) is QHGI -
    reached 7.375 on the back of Medicare whistleblower
    lawsuit taken up by the government, subsequent collapse
    of earnings blah blah blah. Now back at 13 and
    showing strength - the whole experience will probably be
    mostly just a memory one year after its

    Despairing longs, shorts predicting of 5 or bankruptcy, a
    few voices saying "wait a minute, it isn't as bad as
    THIS price suggests." Where have I seen all this
    before? And how many times have I made money by showing
    some iron balls on such occasions?

    Fact is, I
    know why longs are kicking around prospects. What I
    can't understand is the naysayers burning so much print
    to tell everyone who'll listen that the sky is
    falling. The potential profits shorting here are too
    small, and the threat of recovery too large to make PZN
    a fantastic short play. Try some outlandish
    internet stocks for a no-brainer short. So why are the
    doomsday gang here - to maliciously punish the stock? to
    be "right"? because they loving heaping insult on
    injury? small-minded ego needs?

    I'm going long
    this baby!

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    • There are some possible technical scenarios that
      would put the stock this low, but there are other
      possible outcomes, too. I'd like to think we will see 15
      before we go below 9 (barring any more major negative
      news). I'm sorry to see such gloom and doom here. I
      don't like seeing the term "mismanaged company" being
      used so frequently without challenge. Obviously there
      was an accounting error and many think it was
      intentional. So that makes management either inept or corrupt.
      IMHO PZN seems to be managed very well by folks who
      have, at least temporarily, behaved foolishly or
      immorally. Also, be patient. The debacle is only a few weeks
      old and you expect the company to be responding in
      some very significant ways already. Give them some
      time to think a strategy through!

      • 1 Reply to pkn4mom
      • I hate to be the doom and gloom guy, because I
        have publicly supported Doc. The first problem with
        the conference call was the announcement of the
        "accounting mistake" and change in fees. The second problem
        was Doc's demeanor in the CC. Result, downgrades and
        running for the exits. In the week that followed, one
        significant shareholder (now a former shareholder) ferreted
        out an additional problem: lower occupancy levels due
        to Youngstown. When this got publicized, it was
        semantically described as a freeze on federal prisoners, which
        wasn't accurate. That gave the company the opportunbity
        to address the occpancy issue as "squelching
        rumors", instead of admitting the problem. Bad attempt at

        I'm not sure how to fix the problem. Right now it
        seems that Doc is maintaining his atitude that he's
        right and the rest of the world is wrong. Juggling
        OPCO's management isn't the solution. When it's
        announced, don't expect favorable reaction.

        time is always needed to think through a strategy. But
        the thinking is being done by the guys who brought us
        the REIT strategy which for the past year has proved
        to be foolhardy. I suspect more unsettling financing
        news will be forthcoming before anything of positive

    • There's a doomsday gang here primarily because this company and its industry have a fanatical opposition - the government types who are displaced by its logic and success.

25.91-0.05(-0.19%)Nov 25 4:01 PMEST