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Corrections Corporation of America Message Board

  • ewocfo ewocfo Dec 8, 1999 4:31 PM Flag

    Prospectus

    Has anyone seen one of these yet?

    Didnt
    Baby Doc say they had to distribute a prospectus
    before the dividend could be paper?

    Have we
    reached the drop dead date for getting a prospectus out
    and declaring a year end deadline?

    If we are
    not getting a prospectus, it seems to me that
    eliminates certain possibilities, one of those being a paper
    dividend.

    Whatcha think crew?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • My recollection of the August conference call in
      which this was discussed was that the REIT rules
      require PZN to give shareholders a choice of paper, and
      that essentially PZN will have to put out a proxy
      statement with disclosure about the different securities.
      It was for that reason, Baby Doc said, that any
      decision about paper vs. cash would have to be made well
      before year-end; I seem to remember him saying that
      shareholders would have to be solicited beginning with a
      filing in November to have enough time to get everything
      done.

      • 2 Replies to bettyboro
      • I agree with your collective recollections. I
        wonder if "the answer" is that management needed to
        distribute a proxy if there was to be a choice but now we've
        essentially been told that the Special Dividend has mostly
        been paid (we thought it was the common dividend)
        already. I would assume that the balance of the Special
        (whatever that amount is?) will need to be paid in cash
        this year since it's too late for a proxy. However,
        this would seem to be in conflict with the credit line
        covenants, which required a SI if the special is to be paid
        in cash.

        I wonder if that's why Lehman left.
        Doc told them of his plan (the Special has mostly
        already been paid) and they told him he couldn't do that
        because it's a violation of the covenants of the loc THEY
        led. I'll bet Lehman had no choice but to quit.
        Interesting scenario, but I don't know what it portends for
        the future.

        It seems a bit surprising that
        we've not heard anything from the banking group.
        Normally, the group would advise the client that they are
        outside the covenants and that information, being
        material, must be divulged to shareholders...unless PZN is
        hiding behind "a quiet period".

      • Isn't an 8-K rquired to be filed with the SEC for
        major financial changes? Or is 10Q disclosure
        sufficient?

        The company has confessed that its major tenant
        cannot meet its lease obligations without raising some
        money (as reported in the 10Q). Similarly, the company
        obviously is in danger of not meeting the requirements for
        being a REIT as of the end of 1999. If there is any
        plan at all to de-REIT, it seems that it would have to
        be disclosed in an 8-K.

        Since we don't have
        an 8-K saying that, can we then assume that they
        WILL meet the requirements by 12-31-99 (i.e. the SI is
        about to be announced)?

    • These guys need to be put in their own prisons!!! Where's Gordon Gecko when you need him?!!!!

      • 1 Reply to stevemyrlin
      • According to many posts here, there is nothing to
        worry about because the co. is worth $20 or above on
        the paper and in their minds.
        They somehow forgot
        to remember leson 101 of investing: that is a co is
        only worth what someone will pay for. Like everything
        else.

        So following on that trend, assuming they are right,
        they all must be selling the farm and invest in PZN
        right now, like "prisonanalyser". Am I
        right??

        After all I figure that from $7 to $20 in 10 months is
        potential to get rich if you put enough money into
        it.

        By the way you'll get my shares soon and I ll leave
        covered in blood but not dead (that is for those who do
        not see the knife coming).

        I am just staying
        at this point because $7 will hold another week and
        by then who knows a dead cat bounce of a point or
        two if dividends get paid may remove some blood. And
        to be honest I am really curious about how they'll
        cough up the "dividends"

        Faith is a beautiful
        but sometimes a deadly thing for those who
        beleive.

        And by the way where is cleo who has such eloquent
        discussions about the GREAT REIT?? She probable bailed whiel
        the others who bought the arguments, like me, have
        bled to death. Many who appears to have good
        intentions here have been mislead by PZN management and some
        still are doing their dirty work may be
        unwillingly.

        WAKE UP PEOPLE THAT THING IS GOING TO $7 !!! Stop
        getting excited if it goes up 1/2 point.

    • It's easy to get rattled with the beating we're
      taking, but I don't think you can have it both
      ways.

      Either PZN is fundamentally sound and Crants has done a
      miserable job of convincing the Street, or something awful
      is on the way and the Street is correct in
      anticipating it. Personally, I choose the former.


      Remembering Ben Graham's dictum that the market is a voting
      machine in the short run but a weighing machine in the
      long run, I can't wait to see what PZN really weighs!

    • Doesn't matter what they call it, it looks like
      they have to pay about $335 million in dividends this
      year and so far they have paid about $212 million.
      That leaves about $123 million to be paid or declared
      in the next 3 weeks.

      cb

    • I think that your numbers are off the mark,
      but
      at this point paranoia has taken over the board. The
      dividend announcement should be the 15th of this
      month.
      If the BOD get their act together we should know
      next week. The quiet period and all the legal action
      is having a very negative effect.
      It's hard to
      believe that any company could get this screwed up
      without help from thier financial advisers. The advisors
      that set up this fiasco should be held accountable.
      The fees were in the millions and shareholder should
      seek compensation from the so called experts..Merrill
      Lynch had to pay back millions to Orange county for
      poor advise.
      I don't know who set up, and approved
      this arrangment PZN/OPCO but its unbelievable that
      they could miss so many points.
      Maybe OPCO should
      apply for Federal assistance to pay the rent...
      It
      looks like alcohol and lipstick on PZN .

    • But one reason I love trading on the internet (as the joke went in Barron's) nobody knows all your stupid mistakes...ssshhhhh.

    • They now have to pay whatever is required as
      regular REIT dividend to qualify as REIT.

    • Tax loss selling is killing REITS.

      The underlying business is worth more than
      $18 in my opinion.

    • Regarding comment: 3) EPS "games" can be played
      between OPCO and PZN for Q4 (to reduce PZN's Q4 EPS).

      This can be generally true under GAAP or financial
      accounting, especially if it is downward as GAAP in very
      conservative. But, you are dealing with TAX, and the IRS is
      very aggressive in ensuring earnings are stated at the
      highest levels. I believe FFO is referenced as a
      guideline and may be used for dividends, but the underlying
      requirements are based on TAXABLE Income.

    • In the past I've been able to get reasonably
      reliable info regarding PZN from credible sources. Not
      this time. The silence is deafening. Give the recent
      price action one would have to bet that the news is not
      likely to be great but who the heck knows? One thing I
      have learned is that an announcement will be made in
      the next 2-3 business days on the SI situation and
      that PZN has a few proposals on the table. The Bureau
      of Prisons contract decision will be announced
      within the next 30 days.

      It has been debated on
      this board whether PZN needs an SI but I don't think
      there is any option. PZN has about $100MM left on its
      credit line and is rapidly burning cash. PZN and CCA
      need a a lot more than $100MM and $25MM, respectively
      and yet the dilution could be nasty. I know that I
      very much underestimated the operating leverage
      inherent in PZN/CCAs structure. PZN has gone on a building
      rampage over the last 12-18 months and yet its occupancy
      has fallen to the low 90s. It's clear that PZN/CCA
      need occupancy as close to 100% as possible to support
      its cost structure and feed its debt load. Building
      spec prisons like Cal City and then watching them sit
      empty is a killer. That's why the BOP contract (for
      more than 3,000 beds) is critical and makes you wonder
      how an SI could move forward without knowing the
      outcome of that award. As far as the bank credit
      agreement is concerned, PZN is not in violation of any
      covenants while for CCA I'm not really sure but if they are
      we will hear about it shortly. I really think that
      for PZN to survive and prosper they need to announce
      a big equity infusion to enable them time to boost
      occupancy and get the cash flow up to its full potential.
      If PZN has to pay the special in paper and then
      loses the BOP contract I don't see how they will have
      the cash flow to sustain themselves and fear the
      stock will head much lower still. De-reiting is still
      possible and may make sense in the long term but will lead
      to huge selling by yield investors in the short
      term. Wow, I never would have believed it would get
      this ugly.

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