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# Corrections Corporation of America Message Board

• storthis storthis Sep 19, 2000 10:58 AM Flag

## Conversion

I own 2300 PZN. I understand that I will receive
5 shares of preferred B for every 100 shares of
common I own. 23 x 5 =115. Using todays news release and
\$2 as average trading price they calculate the
conversion to reap 12.2 shares of common for every B
converted. 115 x 12.2 = 1403. Gomer would say, " gaaaalee.
Can someone confirm?

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• plus the \$70mm for the class action suit in shares...plus the possible \$100mm rights offering by year end......plus the......

• You have to factor in the merger (dilution plus added value if any) and the service companies. Makes my head spin.

• First, you are assuming that the current price
reflects actual value. We have no way of knowing that.

Second, the higher the price goes during the week of the
25th, the less dilution there will be--it could all be
a wash as far as market cap goes, but I'll bet
there will be buyers @ .75.

• If PZN is \$.75 during the conversion period that
means it is roughly UNCHANGED from today's \$1.75 price
PRE-dividend. It's looking like the common will go ex-dividend
\$.80-\$1.00 which means the price will be reduced by that
amount on ex-div. date.

PZN has roughly 120mm
shares out. If all PIK shares convert at \$.75 there will
That is 195 MILLION more shares.

• Though I should add (I'm thinking too hastily
here) that anything is possible, so I'm trying to
prepare for all events :)

It seems to me that the
least risk for those interested in a short term play is

• storthis, as far as I can tell, your math
is
correct.

Valuewise, before conversion you have

2300 * 2 = \$4600. Afterwards, you have 3703 * 1 =
\$3703 (not including conversion commission).

• 3 Replies to weibin_98
• First off...it is HIGHLY unlikely that the price
will be \$2 at conversion more like \$.625 to \$1 MAX,
IMO. Because it will be EX the dividend at that
point.

Second you pay tax on a dividend of \$2,813 or
2,300/20x\$24.46, but the present worth of the PIK shares, if you
could sell them at this level is \$1,840 (155x\$16). The
bid is for 100 shares at \$16. Realsitically the

• "Valuewise, before conversion you have
2300 *
2 = \$4600. Afterwards, you have 3703 * 1 = \$3703
(not including conversion commission)."

Your
calc illustrates the insanity of including any "with
dividend" days in the period used to determine the
conversion price. Maybe better to wait until the December
conversion period. Anyone?

• First off...it is HIGHLY unlikely that the price
will be \$2 at conversion more like \$.625 to \$1 MAX,
IMO. Because it will be EX the dividend at that
point.

Second you pay tax on a dividend of \$2,813 or
2,300/20x\$24.46, but the present worth of the PIK shares, if you
could sell them at this level is \$1,840 (155x\$16). The
bid is for 100 shares at \$16. Realsitically the