on the share price. I'm knew to the board and
have been reading some past posts and it dawned on me
that no one to my recollection has said they thought
the share price would go up from here. In other words
I do not recall a post recently where someone said
observation on your part and there's a good
reason why you don't see many people saying the stock is
The contributors to this board can
be grouped into roughly three categories:
First group is composed of relatively long-term holders
who are by definition way down on their investment.
(Actually, a few very long term investors like RAUGAR and MK
are way up on their initial investments.) In many
cases we purchased additional shares in an attempt to
cost-average down our positions. To us in this group, the
predominant question is whether we should do some tax-loss
selling or just keep holding on. That's why you don't
hear us discussing the stock in terms of how
attractively priced it is. Also, we know there are still too
many unknowns and have been burned too many
The second, much smaller group is composed of
individuals who have never owned the stock but spend alot of
time on the board telling shareholders how stupid they
are. I don't understand the motivation behind this
group, but I guess they spend their nights reviewing the
New Lows list so that they can properly plan the next
day's activities. Don't look for many Buy
recommendations from this group.
The third group,
still very small, is composed of people like Kitty and
Cleo who owned the stock and got burned at some point.
They sold a good while ago which in retrospect was
smart. They also drop in occasionally to tell the rest
of us how stupid we are. We don't understand this
group either, except we think cleo must work at a 7/11
based on the timing of her posts. Probably won't hear
any buys from this group either.
you said it all again, but as usual,oh so
eloquently and proffesional sounding. The people who post on
this board are definitely in the groups you mentioned.
I have the misfortune to fit into the first group
but I have learned one thing at least from investing
in the stock market...you must constantly analyize
the current market conditions and make the best
decision you can about your postions with all the
information you can gather and then, play your hand. After
you see what is dealt you, you look at the facts
again and have another go at it. Those who don't
understand the fickle nature of stocks need a good money
market savings account for their money and a new way of
life. I, along with others do not appreciate the "I
told you so types" who always seem to have the
proverbial 20-20 hind sight. I would like to see all their
other posts to see just how accurate they really are.
You could take the stock opinions of a street person
and single out the ones that prove to be on target
(after the fact) and make them appear to be a brilliant
forcaster of the markets...but what does that prove? I
really appreciate the opinions of those who are in the
same tub as many of us are and even the informed
opinions of some of the other non-stock-holding posters
who have the sole intent of helping us with their
past experience and theie vast knowledge. I do not
appreciate those who fit the other two groups that are often
"hecklers" who can sometimes be heard to say "investors
who...deserve to loose all". What garbage! They should spend
more time pulling the wings off flies and
Sorry to vent so much on the board but I submit we
would all be better for it if all the posters would use
their collective knowledge to help us all to make the
best investing decisions possible. Thanks to all who
use their energy posting informative and interesting
dialouge on this and other boards.
Good luck, happy
investing and happy holidays.
Year 2000 FFO would support a dividend in the
range of $1.70 but cash flow wouldn't, especially if
the leases were negotiated to rates that would allow
OPCO to remain liquid, right? And what if the big BOP
contract is pushed into the second half of 2000. Also,
there seems to be some serious doubt as to whether or
not the CA. facility could be used for the BOP
contract anyway - or are you comfortable that it could be?
AND (sorry) Doc's still building out there,
MK, without additional equity and debt injections I
didn't think they could pay $187mm in dividends next
year, given all the other stuff I've mentioned. Am I
I couldn't agree more! The only plan I'm going to
vote for is to liquidate this entire mess. Book value
of this piece of Sh**t is 12.00. Subtract 25% or so
lost at auction... that should leave $9-10 for
shareholders.. much better than if we dilute ourselves silly.
Screw this whole thing! We need someone on our side...
The SEC, a large law or accounting firm... someone
who will stick up for we pawns!
rcarter is wrong also - Jr. Does not own OPCO. I
just don't know where this stuff comes from (cleo?
First, CCA and PZN were separate
publicly owned companies (Doc ran both). On 1/1/99 they
merged, and shareholders of each got stock in new PZN.
Because new PZN wanted to be a REIT, some of its
operations were put into two subsidiaries, wholly owned by
PZN. The bulk of the management business was "sold" to
a new company (OPCO) for $134MM (note). The new
company (OPCO, now known as CCA)was formed from scratch.
It was capitized with $16MM of cash, split between
two PZN shareholders, a Ron Baron mutual fund and
Sodexho. For that they each got 16% of the stock of OPCO.
9.5% was kept by PZN. The balance of 58.5% was given
to the following groups of people: 30% to management
employees of OPCO (used to work for old CCA, but not
PZN(neither Doc nor his son got any of this block); 19.1% to
wardens and other OPCO employees (again, Doc and Jr. not
included); 8% by management employees of New PZN (Doc
excluded, but maybe not Jr.); 1.4% by other new PZN
employees (not Doc or Jr.).
I saw a list of the
emplyees once, I thought, and I don't remember seeing Jr.
on the list. I could be wrong. But even if he were
on the list, it could only be for a piece of the
I believe that the employees had to pay tax on the
"value" of the stock they received (based on $50MM total
value, unless it was restricted somehow). Old CCA took a
Q4 charge for the value given to employees.
It is really hard to try, or want to think, and
about what is happening here. It seems there is nothing
we can do about it. Based upon your message, we
don't really need Blackstone, Fortress, and BOA.
De-REITing and combining OPCO/PZN would be
Would it be possible to sell off some of the prisons to
other companies to generate cash? The debt/quity ratio
is still less than 1, and with $1225 million of
long-term debt, the company still generates $250 million in
income. You state this income should rise. Why not sell
everything off? Would it be better than the deal were
getting? How can we add another option to the shareholder
PZN has approx. $80MM of availability under its
credit facility at this time. PZN and CCA have been
burning cash at a very rapid clip. Doc and Jr went on a
building spree for which we shareholders will be paying
for several quarters to come. New management and the
capital infusion are steps in the right direction but the
exorbitant cost of PZN's debt and equity put them behind the
8-ball and will conspire to make this stock dead money
for quite some time. Hate to be so negative but its
taken me a while to grasp the gravity of the situation
here. The reality of the SI is that PZN needs them as
much to bridge the negative cash flow gap until
occupancy problems are fully rectified rather than for the
ability to pay the dividend. You and RP have been right
all along that PZN should de-reit and cease paying
dividends in order to right the ship and grow profitably
down the road.
Could do the same thing, if we have all the
numbers of the company correct. I get a feeling we don't
have the true scope of what happened in
Anyway I think this is water over the damn because this
deal will be through as no one will do anything else
to stop it, change it or continue seeking new
investors. Merrill has cashed out I'm sure.
I can not
see the common going anywhere in a hurry. The fixed
income load with be heavy, and a lot will be pre-tax,
even worse. IMO, it will be a year before any real
progress can be made with the stock.
will look better than they are since the pref. div.
comes after tax. Whether that will fool anyone I don't
Right now I'm sticking with the pref. A and see what
happens with the new preferred.
glass, certainly no need to apologize as my
response had more "tone" than your original post. It's
fairly obvious that many of the Longs on this board are
more sensitive to criticism than we should be. I guess
when you feel you're being attacked by former
shareholders, non-shareholders, union hacks, and "52-week low
list lurkers", you begin to lash out in a unfortunate
I'm certain I've owned 100+ plus stocks in the last
15 years, some for 15 years and some for 15 minutes.
When I compare PZN (the company, not the stock) to my
other holdings, the particularly frustrating thing is
that PZN held/holds more potential and promise than
all the others. For me, it's allure was intoxicating.
I actually followed the stock for years before
purchasing. I mistakenly saw the REIT fiasco as an
opportunity to own something that was had been "too
expensive". The failure has been one of execution. Who would
have thought the person most responsible for CCA's
success (I know some will argue it wasn't Doc) would be
the person responsible for it's near-death. Anyway,
it was the incredible potential of this story that
brought us into this thing and caused many of us to
significantly over weight our portfolios. To date, the best
thing I can say about my involvement with PZN is that I
never purchased any for the family accounts I manage
and I never recommended the purchase to anyone. Quite
a humbling experience for someone not accustomed to
anything but success.
terps - Good question
regarding ownership. Old CCA owned and managed it's own
prisons plus managed all PZN owned facilities. At the
time of the "merger", PZN basically bought all of
CCA's prison facilities. The business that actually
manages the prisons is now OPCO. Two company's who were
(maybe still are) investors in CCA were allowed to
purchase something like 25% of OPCO. I believe the balance
of OPCO is owned by it's employees, but I'm not sure
of that. The operations group (OPCO) could no longer
be a part of PZN because REITs are limited as to how
much income they can derive from "services", that is,
anything other than rent collection. To skirt this
requirement, artificially high lease rates were orginally set
up that effectively transferred OPCO's management
income to PZN by way of high lease rates. Problems arose
earlier this year when occupancy was too low, causing
OPCO to lose too much money, causing Doc to create
FEES back from PZN to OPCO, causing Analysts to claim
that Doc was enriching OPCO at the expense of PZN.
These happennings, along with an overly optimistic
building plan have come together resulting in a cash
crunch for PZN and OPCO.
That's alot more than I
intended to Post as I've more than used my allottment of
time on the Board recently. I'm off to the Christmas
pageant. Good luck to everyone and have a great Christmas.