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Corrections Corporation of America Message Board

  • storthis storthis Sep 19, 2000 7:17 PM Flag

    No concensus apparently

    I posted earlier that most thought converting was
    the way to go. I'd like to retract that statement.
    Opinions seem to be all over the map. I am at a loss as to
    what to do. I figure many are in my position. You all
    or most are posting well thought positions and I
    feel like I'd have to study nearly every post for ten
    minutes to get a better understanding. I'm not sure I
    want to invest that kind of time. So upside down on
    this that I tend to turn a blind eye and just let the
    chips fall where they may. Rarely find myself in this
    position with investments. You must admit this has turned
    into a mess to say the least. Well I strongly applaud
    this board and just may and should deeply study this
    over the weekend and then I'll at least be able to
    formulate an opinion of my own instead of just blowing in
    the wind.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • PZN-B# - PRISON RLTY TRST SER B PFD
      W/I
      Exchange: NYSE comp
      Delay: at least 20 minutes
      Last
      Price: 18.00 at 9:39 EDT
      Change: Unchanged (0.00%)

      High: 18.00 at 9:39 EDT
      Low: 18.00 at 9:39
      EDT
      Open: 18.00
      Previous Close: 18.00 on 9/19
      Volume: 400


      The pfd B has started trading when issued at a
      discount in small volume.

    • P.S.
      Selling today...
      I see there have been several 15k and 20k trades today so far. This paying of the dividend to the purchasers will hit these sellers, will it not?

    • I'm glad to learn someone else is as puzzled as I
      after studying the posts. I'm sorry to say that even if
      I studied all weekend, I probably still would not
      know what to do. Would you be kind enough to post your
      decision when you reach it with a short explanation. It
      would sure be of help to some of us with very little
      sense about what's going on.

      • 2 Replies to buzznook
      • #1
        sell the common before the dividend is paid
        and establish a tax loss for this year and receive a
        tax reduction which saves real cash in April
        2001.....
        then PURCHASE the pfd B at 90% of face value when it
        starts trading on Monday,Sept 25 with the intention of
        converting the pfd B into common during the second
        conversion window starting Dec 7 and ending Dec 20. You will
        then receive common at the lowest price plus buying
        back into the common using the discount
        when you
        acquired the pfd B.

        #2
        buy the common now while
        the due bill is attached with the intention of
        holding the pfd B shares and converting into common
        during the
        ten day conversion window starting Dec 7
        thru Dec 20. This is based on the belief that the
        common purchased with the due bill attached today will
        be purchased at a price that will be lower than the
        value of the two pieces held on Monday,Sept 25, when
        the pfd B will be separate from the common shares and
        will then together have a higher
        value.

        #3
        Do nothing at this time and keep your head in the
        sand and accept what ever happens and hope to recover
        in the next 5 to 10 years. After all management owns
        30% of the shares and institutional professionals own
        30% of the stock. Therefor the Company has
        intelligent investors interested in making PZN survive and
        prosper.

        #4
        When the common stock hits a low
        price during the conversion periods buy common shares
        equal to the number of share you hold. Then 31 days
        later sell the original common shares that were
        purchased at a high price to establish a tax loss. (you
        need to hold for 31 days to avoid a wash sale per IRS
        regulations). This way you establish the tax loss and get
        immediate cash benefits but still save your position if you
        belive that over time the stock will recover in price
        based on the potential value of the real estate
        (prisons)owned by the Company.

      • Shorting the pfd B is out of the question until
        the second conversion window is concluded as the pfd
        B is not trading on the dividend yield (as compared
        to the pfd A) but on the right to use the face value
        of the pfd B as payment in full to receive common
        shares during the conversion window period. This will
        prevent the price of the pfd B from falling in price and
        the price will stay within 90% of face value until
        the conversion window closes.

        After the
        conversion window closes the pfd B will trade at a huge
        discount from face value,
        possibly as low as 50 % of
        face value for a period of 2 years until the Company
        can rebuild its earning power and begin to pay cash
        dividends to the pfd B.(rather then dividends in more pfd B
        shares as now stated)

 
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