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Corrections Corporation of America Message Board

  • roi54 roi54 Nov 15, 2000 11:36 AM Flag

    What's new?

    We all knew this was an ugly situation. The 10Q
    doesn't change that. Is the negative reaction because
    there's nothing positive about the outlook in the 10Q?
    Don't look for it there. There should be some info out
    of the conference call re: the effect of the federal
    contract and the prospect for some asset sales.

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    • You are right about the full service broker. I
      have wanted to sell this several times but kept
      looking at the cost of selling and repurchasing and it
      would cost hundreds of dollars.

      I opened an
      Ameritrade account for each of my children and one small one
      for myself. What a difference. I have made great
      gains myself. When I believe a stock is at its peak I
      sell it and rebuy when it gets lower instead of riding
      it up and down because it costs to much to get
      out.

      I would have been out of this a long time ago if
      not for the high commissions of a full service
      broker. My broker is an old college buddy, but, I will
      need to switch. I have never made money on a
      recommendation given to me by my broker.

    • IMO, if it goes to BK, you want to hold debt, not
      equity. The common can be wiped out quickly, and the debt
      exchanged for new stock. Given the level of debt, that may
      be the only way out (unless rates come down and
      occupancy goes up).

    • Can CXW really go to $.05? IMO, if you reverse
      split the stock from $.375 by a factor or 20 you have
      $7.5. Is it possible to further end up at $1 again? I
      believe so, or $1.00. THat's if we head into BK. BK means
      we end up in the courts for YEARS and the common
      shareholders will have to guess where they stand. In that
      situation only sellers will be about, IMO.

    • I, luckly don't hold much of this but unluckly,
      my commissions on my somewhat discount broker would
      eat up 1/2 of the little I got. Seems I have to hold
      to see what happens, would loose $50 in Las Vegas as
      soon as my wife got to the casino.:-)

      BTW, why
      do you have a full service broker? I kept mine for
      years cause he tossed me some IPO's that made money.
      Got fed up with the phone stuff and him always having
      another call or such. I kept him cause he kinda gave me
      good information on stuff, but in the last two years
      only picked a couple of stocks, other than IPOs, for
      me and they were worse than my picks.

      Moved
      my accounts between Schwab, TD Waterhouse, and
      Datek. Traded a bunch once I got my main account to
      Schwab and made 10K in two weeks. I had kept stocks like
      CXW cause it was more expensive to sell them than
      hold them. Got rid of lots of little ones, PTX, OWC,
      before real bad news. Invested in INTC, TXN, AMD, and
      some others. Even sold one that my broker gave me at
      $42 that I bought at $37 and can now buy it back at
      $37. Only took six trips on that spread to wake me
      up.

      I know it is difficult to sell this one, but if ya
      are keeping your full charge broker, who got ya into
      this one in that account? Ya can at least transfer
      your 4,000 shares to a discount broker and if it goes
      to a penny a share have something left. If it goes
      up, ya can get out cheeper.

      Good luck to ya.

    • "I suspect CXW won't have a significant tax bill
      for at least a year or two."

      The majority of
      the losses are GAAP not tax. GAAP is liberal but it
      is hard to get a deduction for a non-cash expense
      for income tax purposes.

      The financial info is
      very muddy. I plan to dump my shares from the taxable
      accounts for the tax loss. May look at this stk again
      after the 30-day buyback.

      I have continually
      held out hope that this company would recover and it
      still may, but, there are a ton of good investments out
      there that will do better than this company in the next
      year and I have some big losses to overcome.

      I
      will hold my 4000 shares in the IRA's with a full
      service broker since the cost of dumping combined with no
      tax savings wouldn't be worth the cost to dump. Those
      shares can just sit there until they go to -0- or maybe
      go up.

    • yes thanks..of course...73mm as of 6 months.

      I don't think they have done any asset write downs yet so we'll see. They could be big.

    • It's true that CCA is not included in their
      financial statement but the CCA numbers are presented as
      well. When I did the proforma, I modeled it after the
      one they did for the first qtr..it was in one of the
      SEC filings.

      I have been pondering the tax
      question all day and I still don't know for definite sure
      but I suspect they lost the tax loss carryforwards
      when they converted to C.

      flipper, I don't
      follow you on the $350M capex. That was last year. Only
      $70M this year thru 6 months...probably a minimal
      amount required for improvements.This will likely have
      to continue which eats up some of the cash flow.

    • As New MK says, these are only a faction of the
      numbers since none of CCA's numbers are included. CCA
      stopped paying rent awhile ago so the numbers mean little
      at this point.

      The amount of cash and
      non-cash write look to be huge. PZN "stepped-up"(revalued)
      it's prison's to account for 45% lease rates, now it
      looks they will be writing off a lot of that. CXW won't
      paying taxes until the cows come home which is one good
      thing.

      This will be a tax-free cash cow for a long time if
      they make it out of the total mess. For 6 months they
      spent $350mm on capital expenditures as of last 10-Q.
      That is huge!!

      NewMK can tax loss carry
      forward's benefit a profitable organization these days or
      is the tax loss gone?

    • <<1) Doesn't CXW have alot more bed
      contracts
      coming up?>>
      Yes, Federal contracts
      soon.
      <<2) What happened to cause such a downdraft
      in
      revenue? I cannot figure it out.>>
      The figures do
      not include CCA or anything with the new merger. CCA
      stopped paying PZN/CXW rent last year.
      <<3) By
      the time we get settlement shares
      from lawsuit,
      they won't be worth anything>>
      We'll see. the
      assets are worth what they can be rented for and profits
      made from them.
      <<4) In a BK, do you think
      the pref A will
      become worthless?>>
      No,
      but it could be years before anything is settled. I'm
      concerned about the story getting worse before it gets
      better which totally limits upside. If the go Chap 7
      (liquidate) I do think the pref A is worthless. But I highly
      doubt this route.
      <<5) I think a reverse split
      is assured now,
      what ratio do you
      see?>>
      20 to one for certain. The NYSE REQUIRES a price
      over $1...10 for 1 wouldn't do it. If not they are
      heading for the bulletin board.
      <<6) Can't CXW
      sell off some assets?>>
      I'm sure they are
      trying but this stuff takes time.

      It's all
      extremely frustrating for all. I feel use the tax loss and
      look at it again after a period of time. I still feel
      the bonds or the pref A is the only way to go but not
      now with the probability of BK soon. Maybe they can
      work out a reworked loan package without BK, I hope
      so. But this stuff is very muddy with many different
      people VERY upset.

      I still feel CXW can work it
      out as I always have. But they have serious problems
      ahead and this will weigh on the stock. If they could
      have sold assets, they would have. If they could have
      raised equity they would have. Neither happened and the
      news they have to TRY and rework the loans does not
      show either the other options were there.

      JMHO

    • No offense and I should not disclose my position. My orginal goal was an arbitrage between the pref B and the common, not a call on the finances of the comapny.

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CXW
37.17-0.12(-0.32%)Dec 19 4:05 PMEST

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