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Corrections Corporation of America Message Board

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  • billberggren billberggren Dec 31, 1999 1:50 PM Flag

    Fraud lawsuit filed 12/30/99 ...

    This is the 2nd class action. The group gets an
    18% dividend if the stock doesn't go up, and if it
    does they get the option to buy at 6.50 (can't
    remember the actual number). OPCO and PZN are 2 different
    companies. Of all the companies why was it OPCO the one that
    caused the problems in the first place that we have to
    merge with. I would rather merge with one of the other
    private prison companies or liquidate. Preferably we
    would get rid of all involvement with OPCO and go
    alone.

    With or without Blackstone, et. al. the stock probably
    will go up IMHO. However, it would go up faster with a
    CEO that is pro stock holder, rather the a CEO pro
    OPCO.

    The debt and cash flow according to the balance
    sheet, is not too bad. However, things may be worse that
    I think and in this case Blackstone, et. al. may be
    the savior and not the type I think they are.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Now that everyone has read the 8-K lets stop
      saying that Blackstone can convert at $6.50. The
      convertible price is subject to downward adjustments
      (surprise-no upward adjustments) not all of which I fully
      understand(legalese). For example if PZN makes a series of payments
      totaling $50 million because of securities litigation the
      $6.50 price will adjusted down. Two $25 million
      settlements or judgements over the next couple of years and
      Blackstone(Investor Group) could convert at a price far less than
      $6.50. The covert. price would be adjusted if PZN ever
      made a dividend payment or issued securities although
      that shouldn't happen because Blackstone will
      effectively control 6 of the 10 board seats with no members
      of management on the board(can attend meeting but no
      voting rights). Even buying at $5 I'am still at a loss
      why anyone would vote yes to a deal which cedes so
      much control to the investor group at fire-sale
      prices. If you are buying at $5 hoping to ride it to
      $6.50 and pocket 30% I can understand that. Hopefully
      some of the buyers this week are looking to protect
      their interests and will vote no and hold out for a
      less dilutive deal. Looking forward to see how the
      board will sell this deal at the CC.

      • 1 Reply to maddognight
      • I'm not sure why Blackstone would ever want to
        convert...guaranteed 12% return in the preferred or 18% compounded
        retroactive to investment date in certain circumstances.
        Those circumstances can be triggered by certain things
        over which Blackstone will effectively have
        control.

        Why would you convert unless the stock soars out of
        sight.And what are the chances of that happening when they
        will be paying $50 in preferred dividends
        annually.Where's the cash going to come from to continue the
        growth.

    • blackstone has a good reputation with the street and with them pzn should get the creditabilitywe needed to get the stock moving upward...it's all about cash flow

 
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