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Corrections Corporation of America Message Board

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  • RetiredPaperman RetiredPaperman Apr 14, 1999 8:07 PM Flag

    Well, if misery likes company, I'll be w

    It is clear that CCA's initial drop from ~40 to
    20-25 was due to the REIT issue. A reasonable person
    could argue the amount of the drop is not justified but
    they can't argue the reason for the fall. However, I
    think another issue pulled PZN down from 25 to 16 and
    that is the (as yet unexplained) projected slowdown in
    the industry. I recall you mentioned this issue a
    while back, "blaming" Doc and co.

    Well, I don't
    know who to "blame". As the industry leader, CCA
    certainly blessed those numbers but so did every other
    player in the industry along with a dozen Analysts. I
    see today that WHC has dropped from 30 to below 15 in
    the past year. If we considered CCA a growth Co. then
    WHC should have been considered a Super Growth Co.
    because they shed ownership of the facilities allowing
    them to concentrate on growth.

    I don't know how
    fair it is to benchark against CRN, especially when we
    look at what's happenned to WHC. I've never followed
    CRN so I have no more idea why they barely dropped in
    the past year and I also don't know why they dropped
    from 24 to 8 in an earlier four month period this year
    (April to July). Did CRN lose 2/3's of it's value
    because CCA decided to become a REIT? More rational
    thinking by the market.

    To me, it's clear the big
    issue here is the dramatic slowdown in the projected
    growth of the industry. Perhaps Doc & Co. saw this and
    that's why they went to a REIT model. I don't

    Personally, I'd prefer to see (cleo, this is not directed at
    you) more (how about SOME) discussion of issues like
    the Industry Slowdown. I've really grown weary of
    some of the simply childish arguments such as Private
    Prison operators cause more people to go to jail. Yea,
    about as much as an increase in Morticians causes more
    people to die. Give me a break, please.

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