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).
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.
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
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
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".
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
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
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)
I decided to listen to the CC again (MCI is only
.05 on Sundays! - I hate to spend more money on
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.
was certainly clear to me that they intend to be a
REIT. But of course who knows...nothing surprises me
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.....
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
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
Re-combining the companies
isn't that complicated. The shareholders would vote on
De-REITing without merging them is the worst scenario of
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
I admit this is all conjecture on my part. but it
makes a lot of sense to me. The alternatives scare me.
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
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
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?