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Corrections Corporation of America Message Board

  • sapsara sapsara Sep 12, 2006 2:04 PM Flag

    MM is playing with the recent run

    CXW is very highly in debt. $970's million, almost $1 billion of debt. Any money they make it goes to pay off the debt.

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    • Paying off debt increases shareholder equity. The nice thing about CXW's debt is that they build to meet demand by the states, which won't run out of money in bad times.

      State governments hate to spend money building prisons. They would rather rent the space for inmates.

      A governor once told a group I was in that when a governor takes office, he tells his prison commissioner, "I don't want to HEAR ANYTHING about the prisons while I am in office." If the state has to raise many millions to build a new prison, the public blows a fuse. By having it done privately, the problem is solved and the state can spend its money on politically popular things.

      CXW has 1.7 billion dollars worth of land and improvements, which means that they have a large equity.

      I have been long for a while, and am enjoying the ride.

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