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Corrections Corporation of America Message Board

  • Ray_Dander Ray_Dander Dec 6, 1999 1:46 PM Flag

    Blood in the Street

    An astute investor will refrain from laughing at
    the recent ridiculous posts concerning a potential
    bankruptcy of PZN. No doubt there is blood in the Street
    (some of it, sadly, mine), but the sort of blind panic
    represented by some postings is only an indicator that
    notwithstanding PZN's warts, the current price of $7+ represents
    an incredible opportunity. In September, Dreman
    thought it was a cheap stock in a cheap sector. That was
    at $13. The sector is substantially cheaper now, and
    so is PZN!

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Now I know where that sick feeling in my stomach
      is coming from! I totally agree with you about the
      tech stocks - and most of these companies have YET to
      make a profit, but the analysts just seem to love
      them.

      I guess I'll remain on the sidelines and hope for
      better returns in 2000. Good luck to you, myself, and
      all other PZN longs.

    • limited to $7 5/16.

      w_

    • that these bozo's could dilute the hell out of us
      shareholders by giving a stratigic investor a great deal.
      Management is participating in mental masturbation by making
      a simple solution complicated. Issue a bargain
      security to existing shareholders in lieu of a cash
      dividend. That way existing shareholders will not get
      diluted. Anyone who wants cash can sell the bargain
      security. If management makes it juicy enough, maybe the
      sellers will even reap a gain.

    • "I do agree that it's too late to deREIT it this
      year. I would think there would need to be a vote and
      we're out of time."

      Not by a long shot. With the
      dividend switcheroo, PZN effectively has until 9-15-00 to
      establish its REIT status for 1999. Condition 1 is making
      sure there is no leftover CCA E&P at 12-31-99, and it
      will be easy to have accomplished
      that.

      Condition 2 is declaring the regular dividend for 1999 by
      9-15-00 and paying it by 12-31-00.
      That would give
      them plenty of time to get a prospectus out, either on
      choice of securities for the dividends, or on an OPCO
      merger and de-REITing, effectively retroactive to
      1999.

      Having said all that, and regardless of what we think
      makes sense, I would guess that Doc still is in control
      and will continue doing all in his power to keep the
      present structure intact.

    • The worst case is if CCA files bankruptcy, then everything is up for grabs.

    • Sorry for the confusion; I've confused myself at this point. I do agree that it's too late to deREITit this year. I would think there would need to be a vote and we're out of time.

    • Not sure I'm following you. If they paid more
      than taxable income this year, balance would go toward
      the special dividend or visa versa with no income
      taxes payable.

      I still can't see how PZN could
      not be a REIT for this year. It would REQUIRE a vote
      to do otherwise. The ONLY option I can see would be
      for a vote of the shareholders next month with a
      decision whether or not to be a REIT for 1999. With such a
      vote, PZN would still be liable for income taxes on all
      1999 taxable earnings regardless of dividends paid.
      Without a vote, despite what some others may argue, I
      don't believe PZN can remain as a "C" Corp for 1999.
      They would just have to pay penalties for not making
      the distributions timely.

    • What is the worst case scenario here????
      They
      pay special in securities and use expaned
      credit
      line as needed to grow business.

      I don't see a
      company earning $2.00+ in FFO
      going bankrupt. Maybe I
      am wrong and missing
      something, but I just don't
      see it.

      Anyone care to answer?

    • Since PZN has probably already paid out more in
      dividends than they have had in taxable income (depending
      on how you calculate net income, considering OPCO
      eating losses), isn't it accurate to say that they've
      not really received a full tax benefit from the
      dividends paid this year? Don't know if I'm making sense
      but I'm trying to point out they this year it appears
      their "deductions/dividends" will significantly exceed
      what their taxable income would have been.

      I'm
      not sure it matters, other than to confuse an already
      confusing situation.

    • View More Messages
 
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