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
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.
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
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
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.