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.
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
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.:-)
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.
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
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.
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
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
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
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
Yes, Federal contracts
<<2) What happened to cause such a downdraft
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.
the time we get settlement shares
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
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
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.
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.