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Corrections Corporation of America Message Board

  • Reitmaster_98 Reitmaster_98 Dec 6, 1999 11:28 AM Flag

    Special dividend is guaranteed.

    Either in Cash or Stock...read the
    10-Q

    One way or another it will be paid.

    I think
    PZN may get an investor at these insane
    prices
    that is willing to put more than $100
    million into
    company.

    REIT

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    • I hear you but the point I was trying to make is
      that Doc could make the choice such that most
      investors would essentially be forced to take the stock.
      For example offer $2/share in cash or $5/share in
      stock. At some point reasonable investors would have to
      choose stock, I would think.

    • <<<why not offer either $2.00/share in
      cash OR $3.00/share(pick your price) in the new
      stock?>>>

      That would probably work. Problem is, I think you
      would be in the minority in taking stock. If the offer
      was preceeded by some really positive news like
      completing a big new contract or California's ruling being
      overturned, etc., then maybe more investors would take the
      stock. IMO, Doc would have to line up the institutions
      and big investors to take the stock rather than cash
      for this to work.

    • I agree completely. Am not only still in, but
      have increased my positions over the past week. If PZN
      doesn't recover within six months or so, you can expect a
      well-publicized lynching of a West Coast portfolio manager by his
      enraged clients!

    • for the next couple of weeks. Just like I said before we resume to $6 by year's end. At least we can be confident of that certainty if nothing else.

    • Is that I still am of the opinion that the
      business model (PZN and OPCO) can still earn close to $2
      annually in the long run. I base this on consensus
      projections by analysts as well as projections by some of the
      more informed posters on the board.

      In an
      earlier post I mentioned 5 problems that I felt were
      driving the stock to unrealisticly low levels. The only
      one which wasn't temporary was the management of the
      company. This is the thing that really bothers me right
      now.

      Most of us that are still in this thing are value
      investors. This is how I label myself.

      It has been my
      curse to get into most stocks way too early, but
      fortunately I have had success by holding long term and
      selling when the company comes back into
      favor.

      The difference between PZN and most other situatiuons
      I have been in is that management has not been
      straightforward. The latest example of this is the conference call
      where there was no Q and A. You can find many others by
      simply reading this board.

      The mistake I m

    • I doubt that Georgia would cancel any contract
      with the privates due to price. The State of Georgia
      estimates their own per diem cost to be in the high $50's;
      PZN/CCA's rate is in the mid 40's and the other private
      provider in Georgia, CRN, is in either the high 30's or
      low 40's. Either way, the privates' costs are
      significantly lower than the State, and Georgia has stated they
      need the bed space.

      I'd guess that if there was
      any truth to PZN/CCA not renewing the Georgia
      contract, it would be because PZN/CCA had another source of
      inmates in mind. I hear that Georgia can be difficult to
      deal with sometimes.

    • It seems to me that if PZN is facing a liquidity
      crunch of sorts, an easy fix (albeit one that would piss
      off those who like the REIT status) would be to
      simply stop paying cash dividends and forego REIT
      status. You'd conserve the cash (though some of it would
      have to be paid in tax) and be able to lessen the need
      for credit.

      Am I wrong on the foregoing? If
      the company went this route, would management still
      find a way to screw up further? Any comments would be
      appreciated. I'm holding PZN as a long term investment but
      would like some encouragement that crime is still a
      problem, criminals need more prisons, and PZN has the
      solution to overcrowding.

    • As you said, PSA offered a choice to it's
      shareholders, $.65 per share in depository shares OR $.62 in
      cash. Given PZN's precarious cash position, what's to
      stop them from offering a really one-sided choice to
      satisfy payment of, for example, a $2.00 required 1999
      common dividend. If $2.00 was the required distribution
      to retain REIT status and they really want to
      conserve cash, why not offer either $2.00/share in cash OR
      $3.00/share(pick your price) in the new stock?

      Such an
      offer would "induce" shareholders to accept stock and
      personally I'd rather take the stock in this choice if it
      means not having to be diluted by selling a Strategic
      Investor $200 million of stock at $7/share. At least if
      you accept the $3/share in the new stock you are not
      being diluted. Kind of like a Rights Offering except
      shareholders aren't paying anything in. If some shareholders
      choose to accept the $2.00 in cash, so be
      it.

      While this all may sound too far-fetched to consider,
      think about what we've really been through and how much
      of that could have been forseen. I'd rather see
      something like this than fire-sale prices paid by a SI.

    • are 'all of' you holding on to PZN when you all seem to know what's coming down the road?

      Are you guys company people with 401K program on this stock?

    • Re: Public Storage

      Public Storage is a
      real weird situation. Here is a company with great
      cash flow that is in the situation of having so much
      taxable income that it has to INCREASE its dividend to
      conform to REIT rules. However, PSA would rather issue a
      new class of common stock rather than increase their
      dividend. Seems they want to be a growth company without
      having to pay income taxes. Maybe this is what Jr.
      originally had in mind! Yes, it does seem to be more like a
      preferrred but to PSA the additional dividends on the new
      shares is a lot less cash out than the principal they
      would have to pay out.

      Bottom line...
      shareholders are being given a CHOICE between cash or these
      shares at a discount price. Common stock can be used
      that way, even by using the regular common shares.
      This would basically work like a DRIP where the
      dividends are being reinvested in more shares but still are
      taxable to the shareholder. The key word is
      CHOICE.

      The problem with PZN using a "DRIP" is knowing what
      percentage of shares would want cash instead of more stock.
      Judging from recent events or non-events, I think a whole
      lot more people would take the cash rather than more
      stock, even at a discount to market, than maybe would
      have been the case a few months ago.

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