I can't speak for others but if I had to develop a worst-case scenario for a new investor it would be as follows:
You buy Monday at $5.75. Blackstone announces later that week they've put in $300mm at $5. California never gets fixed. Interest rates keep going up. Some good Wardens quit out of disgust. Prison Operations problems increase. One year later we're a $3 stock. Blackstone buys the rest of the company for $4.
I think that's the ultimate downside from here. While that downside doesn't look that bad (considering I think we could be a $14 stock in a year if alot of things went well) you have to remember that the current shareholders are tapped-out, pissed-off and run-down so there is no buying pressure coming from us. Plus, the tax-loss selling is vicious and will continue through next Friday unless there is a favorable announcement.
That leaves potential New investors who I think are (correctly) taking the position that they want to see Blackstone's terms before they make a committment.
As far as fear of BR, I don't think even our worst detractors believe that's a possibility. If Blackstone fell through we'd just stop all capital expenditures, cut the dividend to Litt's $1.50 - $1.60 and maybe deREIT. Probably would be a $3 stock for a while but no BR. JMO.
RP Are you saying that PZN will remain a REIT and continue paying dividends of about $2/share? I thought the REIT status was killing them and that until they de-REIT they will get nowhere. Why would Blackstone put $300 into PZN if the bulk of that money goes for dividends?