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Corrections Corporation of America Message Board

  • flipper_58 flipper_58 Dec 27, 1999 9:59 PM Flag

    Doc gave up

    After thinking about for a day I've determined
    Doc just had enough, so he handed Merrill who handed
    Blackstone the check book. IMO, no one who was fighting for
    their share of the company and the future of it would
    of handed Blackstone such a sweetheart
    deal.

    IMO, the defense of the common shareholders is very
    weak at this time that's why I'm only sticking with
    the non-dilutive parts of the company. If the plan
    fails in the next 12 months they will be back into the
    common share holders pockets again.

    I have not
    gone through the numbers yet but sockey usually has
    them right. We might be looking at a more serious
    occupancy issue then was orginally discussed, this huge
    capital infusion might say.

    The other issue is the
    inflated "step up" apprasial's going into the merger. PZN
    20k+ beds where stepped up a large amount. It could be
    the bankers wanted more equity as the asset
    apprasials from 40% lease rates can not be supported
    anymore.

    Either way I can't see declaring this a victory yet.
    Maybe it's the low for the stock, I'm not very good in
    predcting those things but it sure smells like more
    skeletons in the closet to me.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • I'll look forward to seeing your numbers. Thanks. Too cold in New England.....oh well have fun.

    • So you are asking me to submit the following
      complaint?

      I am complaining because sometime in December,
      during your quiet period, some guy whose real name I
      don't know said that he called PZN and PZN told him the
      special would be paid. Then later they said it wouldn't
      be paid. This makes me mad because even though this
      company has been misleading its shareholders for over a
      year, I really thought I should be able to trust
      them.

      Sorry--I refuse to be a part of any lawsuits or
      complaints--don't like the mentality behind them. But even if a
      complaint is valid, the only ones that will get hurt by it
      are the common shareholders.

    • the vote takes place in 2000 thus the 1999 special is still in play until a yes or no vote is in!!!!!

    • with the insider buying all above $10
      would they walk away from a 50% loss?
      those who bought along with the insiders like me should just ride this out

    • in the Third Qtr was $10.3 million. New CCA
      burned through $12.2 million in cash in 3 months. The
      6/30 balance was $14.8 million by 9/30 it was
      $2.6.
      This is speculation on my part but I'm guessing they
      were hoping the occupancy rates
      would rise enough
      to provide the cash flow to kept them going but it
      did not happen.
      How many developers have expanded
      to quickly got overextended and squeesed by their
      lenders.
      Flipper I'm not an expert on capital markets
      but why did they not have a common stock offering a
      few months ago when the price was in the teens?

      • 1 Reply to socksey
      • ""but why did they not have a common stock
        offering a few months ago when the price was in the teens?
        ""

        Remember not to long ago when they stopped HBSC from
        buying stock monthly in $16 area as the "price was too
        low"? Also $100mm junk deal issued in the summer was a
        bomb, getting 1/3 done what they wanted. I think at
        that time they knew there was no chance or floating an
        equity deal.

        One question I've wonder about was,
        "where has been HSBC all this time?" They have been such
        a dependable investor in PZN and were turned away
        in the recent equity financing, I think. It was said
        they wanted an strategic investor, meaning they wanted
        someone to can Doc I guess. HSBC was ready to put $600mm
        a year into PZN. Did DOc say no to them right till
        the bitter end thinking it would all turn on a dime?
        Inquiring minds want to know.

        Socksey what do you
        think is the best avenue to proceed with this company?
        If the new preferred trades the arbs will put a bit
        of pressure on this stock. With a 12% coupon and a
        20% premium, on a low priced stock this is a prefect
        convertible arbitrage. MAybe Blackstone will play the same
        game. Long the preferred, short the common. Collect the
        coupon, the short rebate, and do it with as little as 10%
        down because the transaction is considered boxed for
        NYSE margin rules. Leveraged this type of transaction
        can provide 25% returns with a fraction of risk of
        owning both. This tends to be more "side stuff" and
        certainly will not be that controlling of the stock. This
        is NOT a "death spiral preferred" as was asked
        earlier that creates endless amount of new stock.

 
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