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Corrections Corporation of America Message Board

  • tubo55 tubo55 Dec 23, 1999 7:10 PM Flag

    is anyone here bullish

    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
    "I'm buying".

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    • observation on your part and there's a good
      reason why you don't see many people saying the stock is
      "a buy".

      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.

      Good luck.

      • 3 Replies to RetiredPaperman
      • 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 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.

      • <EOM>

      • Thank you for your compliment and your comments.

        Are people concerned because of the low stock price, or because they believe the company could go under?

    • 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!

    • <EOM>

    • rcarter is wrong also - Jr. Does not own OPCO. I
      just don't know where this stuff comes from (cleo?
      Litt? r7?).

      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.

    • and make it easier on themselves and name the stockholders as unsecured investors. Is that what everyone wants to hear? Let's all piss on the fire and go home.

    • 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.

      The numbers
      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.

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26.04+0.13(+0.50%)Nov 27 1:02 PMEST