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Corrections Corporation of America Message Board

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  • RetiredPaperman RetiredPaperman Jan 5, 2000 11:39 PM Flag

    Food for thought....

    wrong. In fact, they did just what every other
    party (except Doc) did; they looked out for their best
    interest. My beef with the situation is that our CEO cannot
    fairly negotiate a package for himself while
    concurrently negotiating for the shareholders.

    In
    fairness, I've seen nothing in writing concerning Doc's
    $28mm payment, other than Reitmaster's post so I'm
    assuming his information is good.

    You can bet that
    if all that Doc got out of this thing was his 1.6mm
    shares a better deal would have been struck.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • In reading over the posts on this board, and at
      Reitmaster's Club site, it seems obvious that the deal PZN has
      entered into is abhorent to almost all shareholders. It
      is so blatently dishonest that even the least
      sophisticated or casual observer immediately is able to see
      many of the negatives involved.

      I cannot see
      how the lawyers can fail to tear PZN a new one with
      this deal! I've seen so many lawyers filing on
      companies, it is easy to become blase about their prospects,
      but few of those suits have the foundation of this
      case.

      So... I'm going to go out on a limb here and make a
      prediction. THIS DEAL WILL NOT BE CONSUMATED! As a matter of
      fact, I don't think this deal will ever be voted on.
      PZN will de-reit, being unable to pay dividends, but
      it will be forced into the slower-growth scenario
      that it would have been using with more prudent
      management anyway.

      • 1 Reply to Idontwanttohearit
      • I can't touch your finesse with figures! But I
        take the 9 month revenues of both companies as of 9/99
        and prorate a 4th quarter, then subtract 82%
        operating costs (roughly that of 96 and 97), 42 million
        investor cost and 38% taxes. Then I calculate an EPS on a
        24% dilution and a 20 PE and get around $5.6 per
        share. If revenues increase due to either increased
        occupancy or growth then things may look better. Very
        basic, I know. My point is that there are still unknowns
        and still possibilities. I am watching closely
        because no matter what ethics may be behind the deal, I
        don't think the group is stupid and IMO they know they
        need to show a reason why the plan should be accepted.
        I don't have my head in the sand--I'm watching
        closely and am well aware this could play out in a bad
        way. My question remains: why are there so many
        buyers?

    • We do not know what was in those other SI
      proposals. They haven't seen fit to tell us. May have been
      better for the shareholders, but not so good for Doc. If
      Doc has a conflict of interest in these negotiations,
      that could be a real problem. If Blackstone offered
      Doc a fat package of perks and money to sign a deal
      that was not the best for shareholders, that might be
      called a bribe. I find it curious that IR was reassuring
      us that the company "would not screw over the
      shareholders" (verbatim quote from my conversation with a woman
      whose name I know but will not post), while the i's
      were dotted and the t's crossed on this deal we are
      told was not "chosen" until the last minute. I suppose
      we were being treated to some "Bill Clinton logic"
      in the CC. I would love to see a discovery process
      to uncover the chronology of this "deal." Every time
      PZN/CCA makes a move to fix a problem, big money goes out
      the door for fees to "consultants," bankers, and wall
      street "houses" (and you know the kinds of houses I
      mean). This stinks.

    • This stock is overvalued at $5. Otherwise, why
      would mgmt sell it to the SI group for $2.21. In
      effect, that is what they are doing. The SI group gets a
      12% cash dividend for a minimum of 5.5 yrs. That is
      $4.29 (5.5 * $0.78.) $6.50 - $4.29 equals $2.21. The
      only condition is that they hold the stock for 5.5
      yrs. (Of course, it's even less than $2.21 with all
      the other perks that the SI group gets.)

      This
      makes me feel ripped off, and I bought the stock for $4
      9/16 per share. I say, forget the S.I. group. Keep the
      REIT, sell more common stock for $2.21 (actually maybe
      someone else would even give us more), and skip the after
      tax preferred dividend. (That might leave something
      for us common shareholders.)

      I just wonder
      what Dreman plans to do.

 
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