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Corrections Corporation of America Message Board

  • flipper_58 flipper_58 May 31, 2000 4:37 AM Flag

    The calm before the storm

    From the 8-K, "The parties hereto agree that
    is their mutual intent for the Closing Date to occur
    on or before June 30, 2000,
    subject to the
    satisfaction or waiver of the conditions set forth in Article

    This means we SHOULD be within days of a lot of events
    happening. I assume the plethora of lawsuits is holding
    things up. Plaintiff attorneys assuming the longer they
    hold on the more they thing they will get��watch out
    lawyers�.push this thing to the wall and you�ll get nothing
    because you�ll be at the back of the line at bankruptcy
    court. I hope the Judge for the class action suit is
    acutely aware how we have one shot here�..Pacific Life,
    then the bankers will pull the rug, as I read the
    situation. Common sense never stoped lawyers from doing the
    right thing I guess.

    Then comes the hurricane of
    new shares taking all different forms, rights, PIK�s,
    warrants, Convertible pref��can a stock really go up with
    an on-slot of shares like that? I hope I�m proved

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    • My IRA is with a broker and I'm 50% cash. I
      bought Pzn in Dec. thinking I would get the $1.50
      distribution that they said they would pay. I wanted to get
      better than the 5% I was getting on my money and I will
      take 15% steady anytime. After all PZN was the largest
      in it's field. A funny thing happened on the way...

    • is self-directed. I assumed that the money would
      have to leave the IRA to go to PZN and that the rights
      offering couldn't be transacted internally. I called my
      broker but they couldn't advise me. Said they have to
      receive the paper first.

    • well...

      I suppose if you are 100% invested
      ( 0% in cash) you might be short on options (no pun
      intended). Is your IRA with a broker, a bank, or what? With
      the high volatility these days, I have found it
      desireable to stay between 25% and 50% in cash, to take
      advantage of whipsaw prices, especially in tech
      Even some out of favor old standbys like SPC have had
      great dynamic range over the last 3 months, and it's
      not to hard to catch a dip and sell some covered
      calls near peaks.
      As far as exercising or selling
      the rights from an IRA account, if you have no
      liquidity, you can't really do much unless you have some
      gains you want to 'lock in' elsewhere in your account
      by selling the appreciated securities.

      luck! (and keep your powder dry)

    • The vast majority of rights offerings I've done
      are closed end funds. I traded a Mesa Petroleum
      rights offering a few years ago. Most C Corp. rights
      offerings are about as ugly as you can get. Here's a few
      recent listings below. Rarely do they make money(from my
      vantage)since the nature of a rights offering is a hammer not a
      friendly hand. The ones I see are near or at their
      expiration price. I honestly can't remember seeing a C Corp.
      do a rights offering as a % of the share price like
      PZN's, that's why I feel this will trade similar to a
      closed end fund rights price offering. I see 9 out 10
      CEF's rights offerings priced as a discount to the
      All Canada stocks are required by law to be a rights
      offerings, I have not been involved in any or

      "BUT how do you think the price on the last day of the
      rights offering will compare to the price today?" PZN
      Inmate, I don't mean to sooo bearish as I feel this will
      be temporary. I am a short term trader so I think in
      those terms often. It's very possible we could get some
      nice announcements, the stock lifts and the final
      pricing be down at this level anyway. It's 50-50 it could
      happen as you know. Long term buyers probably should not
      be overly concerned other than to make sure to
      either sell you rights EARLY (IMO) or exercise them as
      I'm sure you will do. A 1/2 point here or there
      hopefully is pocket change looking out a few

      Boy I hope this works out, that pref.A is awfully

    • Change your IRA to be self-directed and you shouldn't have any concerns. Very little cost for self-directed and gives you much more flexibility and avenues for creating and maintaining wealth.

    • participate in a rights offering with stock held
      in an IRA? I would think that it constitutes a
      withdrawal and a taxable event. Perhaps you could withdraw
      2k, buy the stock, and return it to the IRA within 60
      days but I don't think it works that fast. It sounds
      too cumbersome and therefore not practical. And it's
      only 2k. Am I wrong? It seems that the only out is to
      sell the rights for stock held in an IRA.

    • "Can a stock really go up with an on-slot of
      shares like that?"

      Of course it can. It will
      undoubtedly go down first, but it can and I believe will go
      back up. Again, maybe I am wrong, but I think there is
      money to be made. We just need to halt the building and
      fill up the cells. New management would also help

      • 1 Reply to Fedwkr
      • Yes, your right, of course in the long term the
        stock can go up and I think it will. I should have
        defined my time frame.

        As far as the Pref. A goes,
        once we get the green light they will pay the 2
        quarter dividend I think it's "clear sailing" from there.
        They should have the money in from the rights offering
        and the sale leaseback of their building done too. If
        they don't pay the dividend as I am expecting it will
        sell off, IMO. From there it should be a very good

        Wall Street I see has totally thrown in the towel with
        8 "holds" and 2 "sells" on PZN. Once the smoke
        clears by next winter the situation should look
        differently. The Feds need 50,000 BEDS!!! That's as much as
        PZN owns now. everyone on the private side is out of
        accretive capital. PZN has weighed like a 1,000 pound stone
        on everyone. I do agree with Raugar, I think the
        others' stock will bounce back faster. I own CPV, WHC's
        REIT at a 15% yield. In their case they would be
        better off if WHC defaulted on their leases, the Feds
        would pay better.

        Once PZN is not a REIT is can
        fit back into growth mutual funds, or value funds in
        this case.

    • It's not a termination date or expiration date.
      It's simply an intended closing date. The recent
      Bloomberg article (probably planted by the company)
      reviewed the status of the bank facility negotiations.
      That's the key issue.

25.91-0.05(-0.19%)Nov 25 4:01 PMEST