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Corrections Corporation of America Message Board

  • pennturtle pennturtle Dec 29, 1999 2:41 PM Flag

    Bailout

    I originally bought this stock as a company
    running prisons. In the course of about 2 years, the
    company split off its REIT to have it double and then buy
    the original parent company. Then I became the owner
    of both a REIT and a runner of prisons, but lost a
    lot of value, while management and the REIT holders
    made a killing. Next they dissolve my runner of
    prisons only to reinvent the company in the hands of
    management and other investors. That "independent" runner of
    prisons begins to lose money. So for ZERO benefit, Prison
    Realty decides to basically give away money to keep them
    afloat. Why do they do this, because management owns both
    but the little investor does not. With the
    "independent" runner of prisons hemoraging and bringing down
    prison realty, management decides to bailout corrections
    corp and give the investors exactly what they put in
    at OUR expense. By my calculations, we are paying
    these CCA shareholders 250% of their current value. Was
    it because it would benefit Prison Realty. Heck no,
    it was so they can bailout their buddies and cost
    unrelated shareholders a fortune (i.e. us).

    For
    gosh sakes, can someone explain to me why we would
    want to bailout CCA? Why can't we just hire Wachenhut
    to run the prisons and let CCA collapse with the
    Crantz and other greedy people.

    Just a thought

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • "this merger doesn't close till the 2nd quarter of this year.......""

    • Sorry for the late
      reply.
      Jake1349:
      ""Exactly why has OPCO been losing money?
      ""
      1)Occupancy, profitabilty per occupied prisoner is at a CCA
      highest so the only answer is beds. Opco was set up to
      break even at 95%, it has not been close to
      that.

      2)25%-45% leases rates it must pay out. Gross operating
      profit is about 25% if I remember.

      3) Interest
      rates have been increasing too. No one salaries etc.,
      so hard to comment.

      xsealteam1:

      I
      looked through the 8-K and did not see any rate talk
      about the new revolver line. THis merger doesn't close
      till the 2nd of this year so I think it's early for
      them to state it publically.

    • of learning about Corrections Corp back when Doc
      was named Entreprenuer of the Year by Ernst and Ernst
      and CCA stock was in it's shining glory. I doubled my
      money in the stock, but only had a couple hundred
      shares. I was a Board Member of a subsidiary of US
      Corrections, who was purchased by CCA. I learned a little
      about the REIT deal before it was well known by the
      investment community. I knew CCA was starved for cash
      because of acquisitions and a massive building program.
      This looked like a promising way to raise capital.
      Personally, I was looking for income for retirement and I
      thought I knew enough about CCA to take a position in the
      stock. Doc tried to pull the wool over the analysts eyes
      in May and it's been a slippery slide downhill since
      then. If the new owners are honest, capable, and want
      to bring the stockholders along with them, I still
      believe the fundamentals are sound and private prisons
      have a bright future.

    • I empathize with you. A few years ago, I learned
      my great lesson about risk, and irrationally hoping
      for the market to make me whole. I hope it is of some
      comfort to you to know that I also payed dearly for my
      education, but that it has served me well, and I have gone
      on to be a successful investor. It was that very
      education that kept me from buying PZN for its juicy
      dividend. I hope you benefit greatly from your lessons
      learned here. Godspeed. - MORE.

    • IMO, you have done a fine job telling the PZN
      story. You are also "right on" that the market, and our
      country, are controlled by greed. The stockholder has very
      little protection. In time, this corruption is going to
      take it's toll on the American economy. We have
      improved our productivity and our technology, but moral
      substance in the investment community has lost ground. PZN
      is a classic case of just how many institutions can
      take the stockholders money and get away with it. Not
      much has been said about CCA's and PZN's auditors.
      They certainly have not done we stockholders any
      favor, either.
      There are going to be more chapters
      to this story. The lawyers will be next to take a
      big chunk of our remaining change.
      Eventually,
      the pendulum swings back in the other direction.

      Of course, the bottom line is, in my case, my fault.
      Nobody was holding a gun at my head making me stay in. I
      have acted like a loser at a crap table, "hoping"
      (irrationally) that the stock would come back and make me whole.
      I've paid for an MBA in what I've lost in PZN. I hope
      I can retain the lessons of this experience.

    • points. Sounds like your talking every one
      to
      get out. Probably should have when the recovery from
      9 (last bottom) faltered.

      Getting out now
      would be senseless.
      It is at the very
      bottom.
      Maybe started talking about what is good about this
      company NOW. Would this be a stock to buy
      if you just
      saw a possible turn around?
      ***
      I did sell some
      of my position about a month ago. Invested in eweb,
      has done great and
      looking for a pop next week.
      KPN buyout.
      ***
      If new management can show
      valuation and answer
      questions, we may see some
      recovery.

      So how about some positive posts equal to negative
      ones. Thats why you are still here!
      Right?

    • You do indeed get a sofa, just not the one your
      thought you wanted.

      You can attempt and sue the
      company. Go ahead. Its your right. However, if you had
      researched the company and were indeed a "REITMASTER" you
      would have realized that you were buying a growth
      company wrapped in a high yield blanket. The business is
      not changing and really your investment hasn't
      changed except you aren't going to get your share of the
      profits in dividends but rather in the form of capital
      appreciation.

      Go ahead and sue and see how far you get with your
      argument.

    • it does not matter anymore. I have tried to tell
      you before the news was out that there would be no
      cash payment. It was pretty obvious as the price
      dropped with high volume and the yield increased to
      absurd levels.
      Unfortunatly, you brushed the comments
      off hoping for $10. You got to accept the fact and
      live with it. Just realize your mistake after the fact
      if you could not do it before the fact.

      I
      truely understand how you feel betrayed. But that is WS
      world. Nothing you can do but save yourself and don't
      ever trust ANY CEO or Co. that have not kept their
      word on prior occasions.

      Now, I beleive the
      suits will just florish and get consolidated into a
      pretty big one. Will last long and ultimatly acheive
      nothing if you owned the stock (kind of suing yourself).
      I will support the suit. I am out and I just, like
      you, find what happened should not go
      unchecked.
      Also, this mess is far from over and even if SI got his
      way, the de-reit will hit the new compnay pretty hard.
      Do not expect any return in 2000. Instead it will
      get worst as this co has no confidence from high
      growth investors.

      For your own piece of mind,
      just find another company you can trust and invest
      there. Their are plenty. You seem to do some homework
      that usually pays off with straight forward management
      teams. Get some techs or HD or COSTCO and let others
      sink their health and hard earned money into that
      Titanic. You will feel better and wealthier in 6
      months.

      I reinvested the little PZN money left into some
      high growth techs and recovered quite a bit. Got HLIT,
      QCOM and about to get SONE starting 2000.

      Why
      do you expect getting by beating a dead horse? For
      your sake dont make bad decisions after a bad decision
      hoping that will make it right.

    • better terms? Is it a + or -?

    • Exactly why has OPCO been losing money? What is
      OPCO doing wrong that is causing it to lose money?
      This part of the situation I don't understand. You
      seem to be knowledgeable about such matters, so I
      figured I'd ask you this one last question. Thanks in
      advance for any comments you may have about this matter.

    • View More Messages
 
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