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Corrections Corporation of America Message Board

  • ewocfo ewocfo Nov 13, 1999 4:54 PM Flag

    C corp?

    Its great everyone is attempting to figure out
    ole Doc. Several of you are doing an outstanding job
    of reading between the lines. (or reading what is
    never mentioned in the lines at all).

    Lets
    digress. What if Doc converts to a C corp. That leaves him
    in a taxable status for 5 or 7 years (I can never
    remember which). And does he have to merge with CCA, or
    can he leave CCA private? No, I think ole Doc has
    something even more up his sleave. How about creating a new
    pzn with lowered lease rates and merge it with the
    current PZN with an extra fee back to CCA? Maybe we could
    even get a third company created that is private that
    does fund raising and loans money to PZN? It isnt
    going to be simple crew.

    If any of you think Doc
    is going to do something simple and transparent, its
    safe to bet you are wrong. And yes, that is what has
    gotten us into some of this trouble in the first place
    .... too engineered .... but thats the way Doc works.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • thank you for the extra effort to help me
      understand. As for myself, I have never owened a REIT before.
      Am retired and an ex corrections treatment manager
      from WI who believed in the concept while my peers at
      work resisted it. Owned a large position when it
      changed to a REIT and thaught we could use the div. Am
      moitoring closely but going to Europe for 15 days and
      trying to figure out what I should do,if anything, prior
      to departure in 2 days. Good luck with your
      investing.

    • you know the term stuckvestor.....I'm it. RP said
      it well. I like and believe the privatization
      business is a great business, I believe in CCA/PZN's
      product.

      I make my living on the capital formation side
      (flipper) and know generally what's getting done in that
      area, very little in the REIT area as your probably
      aware. My associates and I agree, we don't this changing
      for a long time.

      I don't think PZN is a sell,
      at $9 or $11 or $15 for that matter if they can deal
      with this REIT capital formation problem. PZN can pull
      out of this fine with the right advise. I don't feel
      they are getting it. This was a merger to make the
      company stronger, not weaker.

      All businesses make
      good and bad decisions, it how they deal with them is
      the issue. THis REIT business started to smell last
      spring, it's gotten worse since.

      As a friend
      claims on certain stocks, "it's like dating the hottest
      girl and town and you can't touch her".

      I did
      sell a fair amount through the summer and might dump
      the rest if management doesn't show any signs of
      accepting the situation they are in and dealing with it. I
      think I'll know my answer soon.
      I do appreciate your
      input and I'm sorry to be sorry grapes. I asked the
      same thing of many posters a year ago and fought for
      mamagement's decision making. We are always dealing with half
      a story as investors, but I get the same feeling
      from the long time analyst's that cover CCA/PZN they
      feel Doc has deceived them.

    • Before I answer your question let me say that I
      meant no disrespect to Flipper when I posed that same
      question to him. Just was curious about the positive
      factors that have led him to hold on when his posts
      during the last few months have been so decidedly
      negative. As far as myself I am a value investor that tries
      to buy beaten down quality for a quick move. It
      worked in early July with PZN so I thought I'd try it
      again when PZN dipped below $10 a few weeks ago. I have
      a feeling that it won't be so easy this time
      around. Management credibility, occupancy issues and the
      fact that both PZN and CCA are rapidly burning cash
      have me questioning my position as well. Fortunately,
      I think most of these issues are already in the
      stock price. Any positive news could move this stock up
      a few points in a hurry. However, if this thing
      breaks $9.00 in decisive fashion I'll cut my losses and
      move on.

    • you dont invest anymore money into this falling piece of s***.

    • ON? I want to b positive also but..... it's a long complicated sto...

    • It simply amazes me that this company, with
      operations that are undeniably sound and growing apace, can
      wind itself into such a knot with all these snappy
      moves that have so little to do with its fundamental
      business and have put them in such a pickle. It has been a
      wild 18 months.

      As a long term investor I am
      sitting through this little drama and waiting for the day
      when investors can again turn their attention to the
      operations of the business and not the wheeling and dealing
      of investment advisors and tax lawyers. Unwinding
      this knot will take time, but unwind it
      will.

      Meantime, it seems the core business is still strong. What
      a laughable situation - if not for the grief,
      uncertainty and current loss so many (including management)
      are experiencing.

    • I decided to listen to the CC again (MCI is only
      .05 on Sundays! - I hate to spend more money on
      pzn)

      Jr. did make it clear that they "intend to pay
      sufficient div. in cash or security to qualify as a REIT."
      He also said that with the regular 4th Qt. div. they
      will have paid more they need to satify the special
      div. So they do intend to pay a 4 qt. div.

      It
      was certainly clear to me that they intend to be a
      REIT. But of course who knows...nothing surprises me
      anymore.

      The basic business sounds solid. They are adding 5540
      beds this quarter. And if they get the contracts they
      are hoping for they will go from 28058 filled beds to
      36712. That is a 30% increase! And they would be at 98%
      occupancy. And next year even if they just finished the
      prisons they are working on and filled them it would be
      another 30% increase.

      I was tempted to sell this
      last week but decided to hold off for now and see if 9
      holds.The next few weeks will certainly be interesting.....

    • If you want growth in this sector look at CPV. With 13.6% growth and 11.1% yield I have effective growth of nearly 25%.

    • I've read your posts over the last several months
      and I have just one question for you - why do you
      continue to hold this stock? You make some valid points
      but your overall view is clearly negative so why hold
      on?

    • Bob, Doc & 10Q made it clear that 1)PZN is
      "capital constrained" and 2) OPCO can't make the lease
      payments without raising more money.

      To me, this is
      an admission that REIT status and the split
      companies aren't working. Obvious and most simple solution:
      give it up.

      They obviuosly couldn't announce
      anything and said so. The tax trick and delayed dividend
      announcement, to me, is the same as saying: don't count on any
      more dividends.

      Re-combining the companies
      isn't that complicated. The shareholders would vote on
      it.
      De-REITing without merging them is the worst scenario of
      all.

      I don't see much legal exposure in the
      whole scenario. You can't be sued for not paying a
      dividend that wasn't declared, and that you don't have the
      cash to pay. And you can't be sued for something
      approved by shareholder vote (OK, you can be sued, and
      would be, but I think it's futile - there's far more
      exposure on the earlier round of lawsuits for
      non-disclosure of material events at the time of the merger
      vote).

      I admit this is all conjecture on my part. but it
      makes a lot of sense to me. The alternatives scare me.

      • 2 Replies to newMK
      • of OPCO get in a de-reiting and merger? I guess they get a percentage of the new company, but what is fair?

      • I don't see how a rash of lawsuits could NOT be
        the result of reneging on paying dividends which PZN
        previously led investors to believe would be paid as a
        result of REIT status and their previous
        mergers.

        OK, dereiting WOULD effect a material change that
        MIGHT justify no longer paying any REIT dividends. But
        people who have been buying this stock have accepted the
        premise, one put forth by PZN, that only fifteen cents of
        a special dividend required to be paid has been
        paid. That expectation is in the stock price. The BOD
        has reaffirmed the premise three times this year
        already, at every dividend declaration. To redefine those
        payments now, in my mind, clearly constitutes
        fraud.

        Do you have any opinion on the concept of doing what
        it takes to qualify as a REIT for 1999, and then
        dereiting for 2000 and the future?

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