If this deal doesn't get done soon we are all in
trouble. Obviously it will be much harder to convince
people to invest more money into this if the price
slides below $2. It's a confidence thing and it's hard
to have confidence in a penny stk. Also many
potential investors will not touch a penny stk. The further
it drops the harder it will be to bring it back up.
The absence of news will drop this stk to $2.50 by
the end of next week. There is a point when PZN at
$2.50 will no longer look like a bargin and that point
is fast approaching.
Also this company was
facing a short-term crisis of cash flow. That has not
gone away. Additionally, don't they need to pay BS the
$22M soon. Cash is king and this compay doesn't have
The deal has to happen soon. You can bet the
creditors care about the price of the stk.
I feel for the long term holder all this is
critical and will work for their benefit too.
have some very large loses in this stock so it's hard
for me too be too bullish, I'm trying to be
The question I think is "where is the rent check
going?" Is CCA finishing off their existing prisons? Or
are the operating loses that bad they can not pay
their rent check. If it's the later the recovery will
be very long.
The Pref C is like a stock dividend (especially
if you believe it is optimal to convert to common),
and the rights are like a stock split combined with a
negative dividend (shareholders pay cash to the
That said, I think we would agree that this may still
be a relatively good deal for common shareholders.
As some here have argued, PZN may be a tremendous
bargain right now. I am long, but not as confident as
others. However, I am not long because I expect to make
money simply by receiving Pref C and rights. My hope is
that the $200mm infusion we will be sending in will be
well-managed by PL and PZN will become a profitable
I am a little concerned about the posts that
describe how CCA can not pay PZN rent, and PZN is on the
verge of insolvency, but once we combine these two
losers we will magically have a cash cow. As I say, I am
long. But I do worry that the "cash cow" part is not
too well documented.
So true...""If this deal doesn't get done soon we
are all in trouble.""
From the 10-k.....what
we have to look forward to if this deal
""the Company's independent auditors have included
explanatory paragraph in its report to the Company's
statements for the year ended
December 31, 1999 that express substantial doubt
the Company's ability to continue as a going concern.
The existence of
these explanatory paragraphs may
have a material adverse effect ""
On CCAor OPCO
""the Company has acknowledged to
lenders under its bank credit facility
that an event of default exists under the
credit facility and, as such, the Company has been
paying interest at the
default rate thereunder since
January 14, 2000. ""
""In addition, CCA is
default under the CCA Note and has not made certain
scheduled lease payments to
the Company pursuant to the
terms of the CCA Leases. ""
"During 2000, CCA has paid $12.9 million of lease
related to 1999 and no lease payments relating to 2000.
"" THAT"S NO MONEY TO PZN!! THIS YEAR!!
will go out of business ASAP if this PL deal fails,
the bankers are ready to slam the door. CCA is in
serious beyond bankrupt, and when your only tenant is
that bad, we all should be worried. IMO.
Page f-69 Annual Report - "As of March 29, 2000,
Prison Realty has not provided a notice of nonpayment to
the Company and the amount of unpaid rentals related
to 1999 totals $12.0 million. In addition, unpaid
rentals related to periods subsequent to December 31,
1999 total approximately $77.7 million (unaudited) at
March 29, 2000."
to the speculation about a buyout at 6 or 8? Oh,
that was when the stock was southbound for 5. A
"takeunder" at 5 would have cost what -- about $650 mil, plue
assumption of debt. Wonder what the reason is that KKR and
other LBO folks are not lining up to buy this pig, if
the value is so compelling? They could renegotiate
the terms of the credit faciltiy, hang out an "under
new management (again)" sign, and do an IPO as a
C-corp. Restored to financial health, the occupancy
numbers could rebound based on new contracts and the
bankers and class action lawsuits could be paid off. The
possibilities are endless.