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Corrections Corporation of America Message Board

  • pruman98 pruman98 May 20, 1999 12:13 PM Flag


    I believe the major reason for the decline in
    share price is the increased cost per bed that PZN must
    pay to Correction Corp. that was announced last
    Friday. An increaseto $4,000 from $840 per bed is not
    This also shows the lack of trust shareholders can
    place in managements announcements.
    However, now
    that the news is out what affect wilthis have on the
    bottom line? What was the FFO prior to the announcement,
    and what is the projected FFO considering the higher
    costs. Is the FFO high enough to keep the dividend safe?
    Is the FFO per share expected to grow? These are
    questions that must be answered in order to determine the
    value of this stock.
    Please let me hear feed back
    from anyone who has answers to these questions.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • The dividend and FFO is unchanged going

      Call the company and ask them

      I bought more at $13 3/8 today, thanks for selling
      it off
      so I could acquire more at such a
      ludicrous price.....

      I will enjoy my

      • 1 Reply to Reitmaster_98
      • Your right. But importantly understand that PZN
        will need to borrow to pay that dividend. They will
        not be able sustain the $2.20 through normal cash
        flow until 2000. Again the reason is the inducement
        fee is paid out to CCA but it does hit a one time
        expense at PZN, it's capitalized over a long period, so
        of course FFO changes by a small amount.

        agree this company is trading like it's going bankruot
        which I don't feel is the case as I too boought a lot
        fo shares in this week.

        We'll get our
        dividends, but watch the cash going out that is not included
        on a line item.

    • ``We recently announced a $300 million issue of
      senior notes. The marketing process for this transaction
      is proceeding as planned and should conclude with
      pricing within the next two weeks. The combination of the
      senior notes and a planned increase in our credit
      facility to $1 billion fully finances the Company,
      including the special dividend and capital expenditures,
      well into the year 2000.''

    • Strong base building at these low levels. Many gaps on upside need to be filled in coming weeks!

    • "how's $4.10 in cash to you"

      I don't
      think much of it when the stock price declines more.
      Hell, its already declined more. How many diehards do
      you think will finally get out in December if they
      get lucky and collect that special dividend? The
      selling pressure will make this last week look like a
      picnic for PZN!

    • Prison Realty Trust, Inc. Announces Positive
      Trends in CCA Occupancy

      NASHVILLE, Tenn., May 21
      /PRNewswire/ -- In an effort to dispel
      rumors involving inmate sourcing and occupancy
      levels,Prison Realty Trust, Inc., a Maryland corporation
      ("Prison Realty" or the "Company") (NYSE: PZN), today
      announced selected occupancy data related to the Company's
      primary tenant, Corrections Corporation of America
      ("CCA") and the two service companies affiliated with the
      Company, who together operate
      under the name of
      Corrections Corporation of America. These entities provide
      correctional and attention facility management services to
      governments under contracts for 81 correctional and detention
      facilities with a total design capacity of 71,950 beds, of
      which 70 facilities with a total design capacity
      51,200 beds are in operation. Corrections Corporation of
      America's current system-wide occupancy level is 93.2% and
      the occupancy level for beds contracted for use by
      federal government agencies is approximately

      Since September 30, 1998, Corrections Corporation of
      America has opened 6 new facilities and 5 expansions with
      design capacity of 6,633 beds, including 6,560 beds
      owned by Prison Realty and managed by CCA. "The large
      number of new beds brought on-line, coupled with more
      conservative ramp-up periods, has temporarily lowered
      occupancy percentages from our historical averages," said
      Doctor R. Crants, Chairman and CEO of Prison Realty
      Inc. and CEO of CCA. "Occupancy rates have increased
      Accordingly as these beds were put in use in the first
      quarter of 1999. At December 31, 1998, system-wide
      occupancy was 88.1%, and climbed steadily to its current
      level of 93.2%. Occupancy for Prison Realty-owned
      facilities managed by CCA has increased from 80.4% at
      December 31, 1998 to 88.2% currently, reflective of a
      disproportionate impact of new beds. For those facilities owned by
      Prison Realty and managed by CCA which have been open
      for more than one year, the current occupancy level
      is 89.0% (91.0% excluding Youngstown) versus 85.2%
      (87.5% excluding Youngstown) at year end


    • that the $560 a bed for pre-occupancy costs, 4.5%
      for third-party marketing costs and 5% for general
      and admin expenses FORM PART OF THE $35,000 a bed
      capital cost, to which is now added not $840 a bed but
      $4000 a bed for the ramp-up allowance, for a grand
      total of $39,000 a bed.

      Do I have this right? If
      so, then the only new cost that PZN faces is $3160 a
      bed(from $840 to $4000)?

      Doc did state clearly that
      the 4.5% WAS part of the $35K but he didn't mention
      whether the $560 or 5% were also part of the 35K.

    • Much has been written on Doc's performance,
      However we may not be able to get rid of him but for sure
      someone should do away with the PR Dept. especailly
      Investor Relations. What a bunch of arrogant bastards. I
      urge everyone to send an E-mail requesting input from
      either Doc or one of his associates to address this
      Posting Board. I don't think this is unrreasionable for
      investor confidence.

      Send them a note I
      quarantee if nothing else you'll feell better.

    • Most class action lawsuits enrich the lawyers,
      but return very little to injured shareholders. These
      suits are bery attractive to investors who hope to
      recover losses, because they require little or no
      out-of-pocket costs. If successful, you'll probably get $10 to
      $20. I remember one which was settled for merchandise
      coupons valued at $25 to each member of the class. If you
      really want to sue, get your own lawyer and pay the up
      front costs. Most lawyers will tell you up front if
      they think you have a case. But class action suits
      will go ahead with or without you. By the way, pain to
      the directors is pretty minimal, since the companies
      usually provide them insurance.

    • Monday May 17, 4:09 pm Eastern

      Company Press Release

      SOURCE: Law Offices of
      Steven E. Cauley, P.A.

      Fraud Lawsuit Filed for
      Purchasers of Corrections

      NASHVILLE, Tenn.,
      May 17 /PRNewswire/ -- A securities fraud lawsuit has
      been filed in the Chancery Court of Davidson County in
      Nashville, Tennessee on behalf of all purchasers of the
      common stock and other securities of Corrections
      Corporation of America (NYSE: PZN - news; formerly NYSE: CCA)
      (``Corrections'') between April 24, 1997 and April 20,1998 (the
      ``Class Period''). The lawsuit alleges that Corrections
      and certain of its officers and directors issued
      false and misleading statements regarding Corrections,
      which caused the price of Corrections' common stock and
      securities to trade at artificially inflated prices
      throughout the Class Period. The lawsuit alleges that the
      defendants stated that the formation of CCA Prison Realty
      Trust would be ``accretive'' to Corrections's near-term
      earnings, that Corrections would benefit by that
      transaction and that Corrections would be able to continue to
      grow its earnings at 40-50 percent annually. After
      these statements inflated Corrections's stock price,
      the defendants sold $19.1 million in Corrections
      common stock, at prices ranging from $35-$44 per share.
      However, on April 20, 1998, the defendants announced that
      Corrections would merge into CCA Prison Realty Trust, thereby
      becoming PZN, and as a result, that Corrections's earnings
      would only grow at 17-25 percent. Upon this revelation,
      Corrections stock and securities collapsed in price, and
      currently trade at approximately $15 per share.Analysts
      stated: ``(a)nalysts thought Corrections Corp. was
      growing at 50 percent, and now growth is diluted to 25
      percent,''and Corrections was ``not a growth story
      This lawsuit was filed by lawyers with substantial
      experience in prosecuting class action lawsuits on behalf of
      investors. If you
      purchased Corrections common stock or
      securities and wish to discuss this action on your rights or
      interests, please E-mail or
      call one of the attorneys
      listed below:

      Steven E. Cauley

      Scott E.

      Gina M. Cothern

      2200 N. Rodney Parham

      Suite 218, Cypress Plaza

      Little Rock, AR


      1-888-551-9944 -
      toll free

      SOURCE: Law Offices of Steven E.
      Cauley, P.A.

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