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Corrections Corporation of America Message Board

  • sam_0534 sam_0534 Jan 11, 2000 9:29 AM Flag

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    20 mins - disclaimer

    Tuesday January
    11, 9:16 am Eastern Time
    Alert: Warburg Cuts
    Wackenhut Corrections Price Target to $15/Shr From $24
    (This is a headline-only alert, although it will likely
    be followed by an article soon)

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    • RESEARCH ALERT - Wackenhut Corrections

      NEW YORK, Jan 11 (Reuters) - Warburg Dillon
      Read said Tuesday analyst Thomas O'Halloran lowered
      estimates and price objective for Wackenhut Corrections
      Corp. <WHC.N>, explaining the company recently
      guided investors to lower earnings levels for the fourth
      quarter of 1999 and all of 2000 in light of higher
      operating expenses, larger start-up costs, and slightly
      lower revenue.

      "Our estimated 1999 EPS from
      operations has been lowered to $0.94 (from $1.00) and our
      2000 EPS estimate goes to $1.00 (from $1.20)," the
      analyst wrote, setting a new price target of $15, down
      from $24.

      The stock closed Monday at 10-1/4.

    • spending so much time on a stock that is 5% of my
      portfolio, but used to be 20%. What is hard to take is that
      Doc doesn't take the same kind of cut in his net
      worth that the common shareholders do. Now some will
      call that whining, and counsel us to bend over and
      take it like a man. If we try to fight back, we're
      called sore losers. As Nixon once said, "show me a good
      loser and I'll show you a loser."

    • yeah, this deal sucks. But who was calling the
      shots - Doc? Beasely? Sodexho? Dreman obviously wasn't
      consulted. I suspect that maybe the banks put this deal
      together. OPCO was already publicly acknowledged to be
      insolvent. As brendy45 (I believe) pointed out, PZN/OPCO was
      out money, period (REIT or no REIT). The gun was at
      their heads. I wonder what side deals may exist between
      Lehman, Blackstone and CreditSuisse. Dreman may be the
      smartest guy in the world, but as far as the banks are
      concerned, he's just another common shareholder in line
      behind them. Don't hope for a better deal - it ain't

    • Please respond about the $1B credit facility.
      Earlier you said they had already used 900MM of it. I
      asked you to verify as I believe it has not been
      I'm not trying to put you on the spot, just
      that it is very important information. Please confirm
      or deny.

    • If you conclude your line of thinking then PZN is
      a sell. Things won't get better until next year
      when this money finishes enough beds to proceed cash
      flow forward. Since a huge amount(all) of aftertax
      earnings will go to the preferred they will be back to
      Fortress one more time I'd be sure of that. In the mean
      time the stock will erode, no question.

    • Meant to say a securities or a TAX attorney.

    • I don't think that would be a problem, just means
      Opco is now public. Normally this type transaction is
      called a "reverse shell". One other way to go public
      other than an IPO is for a private firm to buy a public
      firm/ or shell. Browning Ferris Industries (BFI) was a
      reverse shell. It's a lot cheaper to go public as a
      reverse shell than an IPO. Lawyers sell public shells for
      anywhere from $80k and up.

    • One of the things that bothers me most about the
      proposed deal is that CC is to be paid their purchase
      price for their shares of PZN. How many of us can get a
      deal like that. It appears blatantly unfair to me and
      wish I could say it was illegal.

    • I particularly bristle when I hear that this is a
      'done deal'. Neither the banks nor management has the
      authority to make this a 'done deal' without approval by
      the shareholders. And they may find that this will
      not be one of those occasions where none of the
      proxies are returned.

      I'd like your opinion on the
      following view. Just my extrapolation of what I know to a
      logical conclusion, but NOT based upon certain

      We've had a lot of discussion on the technicalities of
      being a REIT, qualifying for REIT status, and
      de-reiting. It seems to me we are mixing a couple of
      different issues.

      As a corporate structure, we are a
      REIT. This was approved in the last merger and
      reorganization. We will remain a REIT unless the new
      reorganization is approved, and the corporate charter is

      For tax purposes, the IRS requires
      certain conditions be met. PZN has failed to achieve the
      goal of meeting these conditions. AND is unlikely to
      do so no matter the outcome of the shareholder's

      Therefore my conclusion would be that if
      the shareholder vote is adverse to the deal and
      restructuring, PZN will remain a REIT in corporate structure,
      but will not have that status with IRS and will have
      a tax liability.

    • I agree again. I am not a securities or a
      attorney but I believe this management and BOD completely
      disregarded and defied the vote of the shareholders to
      qualify to become a REIT.

      I don't know what the
      consequences and legal ramifications of this abuse of power is
      by the board. That to me is like the shareholders
      voting for a board member or an accounting firm and the
      other board members getting together and saying we vote
      against both of the shareholders selections and will name
      a board member and accounting firm of our choosing
      instead. Why have votes of the shareholders if they are
      not binding on the management or the board?

      can only assume their attorneys felt this was worth a
      legal fight. I guess all attorneys tyhink this however,
      especially when that simply increases legal fees that we
      wind up paying for.

      I'm getting tired of these
      corporations that are "of the management, by the management
      and for the management" with a BOD appointed by the
      management to rubber stamp their decisions.

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