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Corrections Corporation of America Message Board

RetiredPaperman 1014 posts  |  Last Activity: Sep 11, 2000 12:05 PM Member since: Jul 21, 1998
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  • Reply to

    What will it take move KMB?

    by reznat Sep 9, 2000 8:20 AM
    RetiredPaperman RetiredPaperman Sep 11, 2000 12:05 PM Flag

    I noticed the stock way off today and recalled an
    earlier news story about how badly the Euro is doing.
    I've got to believe that sooner or later the weak Euro
    is going to really hurt KC's Europe earnings. I
    think the Euro is now about .86 to the US Dollar.
    There's no way KC could have anticipated (and therefore
    hedged) such a weak european currency. I think we'll see
    the impact in Q3 earnings. Perhaps the decline (after
    currency conversion) in Europe's earnings will be offset
    somewhere else so overall KC may hit the number...but it's
    going to be close.

  • Reply to

    RETIRED PAPERMAN

    by cantstandsya Jul 17, 2000 3:36 PM
    RetiredPaperman RetiredPaperman Jul 20, 2000 3:32 PM Flag

    No, unfortunately I let go of it way too soon.

  • Reply to

    Flipper: I haven't been here in

    by NoonanGF Jul 8, 2000 9:17 AM
    RetiredPaperman RetiredPaperman Jul 10, 2000 12:51 AM Flag

    Unfortunately I'm not well-informed. I just try
    to make sense of what little information trickles
    out on this Board and the occasional press release.
    Unless you're close to the prison industry or a
    financial professional you can't find out squat on PZN
    until after the fact. Concerning occupancy, it was my
    recent impression that PZN was making progress but you
    are obviously much closer to that info than me so I
    defer to you.

    MK/Brendy, didn't mean to put
    words in your mouths, was just sharing my impression of
    where I thought you guys were coming from. Brendy, I'm
    a bit surprised you don't have some risk capital in
    this pig considering the grief that posters inevitably
    take on the Board. Then again, I'm back.

    Glad
    CBRL worked out for you. Too much effort for the point
    I made on that one. Sounds like you had the nads to
    grab the 9 handle.

    I've started working my way
    into some of the non money-center banks with some nice
    results. Take a look at UB. There could be another shoe to
    drop but you're getting paid nicely to wait.

  • Reply to

    Flipper: I haven't been here in

    by NoonanGF Jul 8, 2000 9:17 AM
    RetiredPaperman RetiredPaperman Jul 9, 2000 2:08 PM Flag

    flipper and I engaged in an academic discussion
    of liquidation but in my opinion, liquidation is not
    something on the horizon for PZN. Liquidation is reserved
    for companies who's busiess model doesn't work and
    shows no promise. In PZN's case, the current liquidity
    problems are due to what appears to be PAST occupancy
    issues and the sorry state of the Balance
    Sheet.

    Occupancy seems to have been corrected, but the Balance
    Sheet will continue to suffer the hangover from Doc's
    deeds. Companies with proven business plans and negative
    cash flow typically end up Reorganizing, not
    Liquidating.

    Of course, from a shareholder's perspective, I've
    maintained that either form of BR will yield the same to us,
    zero.

    The real question is, is PZN/CCA going to run out of
    cash before they can get combined and get the
    operations straightened out. I have no clue. I stopped
    looking at the numbers six months ago and I'm not sure
    there's enough transparacy now to make much of an
    education opinion.

    If I had to make a decision, I'd
    probably take clues from MK or Brendy as they both not
    only understand the financial side but seem to be
    somewhat close to the industry. I'm trying to read between
    the lines and I don't hear MK saying anything. I'm
    guessing Brendy is betting on survival but categorizing
    his investment as Highly Speculative.

  • Reply to

    The pref. A trading as if this firm

    by flipper_58 Jul 6, 2000 1:31 PM
    RetiredPaperman RetiredPaperman Jul 7, 2000 10:49 AM Flag

    There really shouldn't be any need for the gov't
    to step in. If PZN were to file BR, it would be
    chapter 11, reorganization. In short, they'd get DIP
    financing and continue to operate without interruption. I
    believe such a scenario would result in zero return the
    both the common and preferred shareholders.

    The
    unfortunate situation we now have is that despite the bad
    press, the "operations" are doing OK. They are a bit
    behind the 8-ball because they weren't able to fill the
    beds as quickly as forecasted. The real problem is
    that doc's antics over the past 18 months have
    virtually destroyed the Balance Sheet.

    There have
    been so many payments to banking groups, Blackstone,
    Investment Bankers as well as increased effective interest
    rates (see Brendy's post) that profitability (and more
    importantly cash flow) is almost becoming
    impossible.

    The best operation in the world will fail if you load
    on enough fees and interest payments. PZN is on the
    edge, I believe. But that's only a gut call. I stopped
    looking at the actual numbers when I sold at year-end.

  • Reply to

    The pref. A trading as if this firm

    by flipper_58 Jul 6, 2000 1:31 PM
    RetiredPaperman RetiredPaperman Jul 7, 2000 8:22 AM Flag

    If it would ever be a truly viable option to sell
    ALL the prisons and expect significant value, then
    why, somewhere along the line, didn't they sell a
    couple of their prisons to help the capital crunch.
    Selling 1 or 2 of the CA. prisons sure would have helped
    back then.

    More than anything else, the fact
    that PZN never even attempted to sell one prison (that
    we know of anyway) during their past (and current)
    cash crunch confirmed for me that a liquidation option
    is not really viable.

  • Reply to

    The pref. A trading as if this firm

    by flipper_58 Jul 6, 2000 1:31 PM
    RetiredPaperman RetiredPaperman Jul 7, 2000 12:47 AM Flag

    I never really left; I just quit posting. Anyway,
    back to our discussion of liquidation values...I would
    guess that in theory your numbers are sound. The
    problem is that in a bankruptcy situation, logic and
    sound business decisions are thrown out the window.


    Once we've reached the point where PZN runs out of
    cash and the banks have decided they aren't extending
    additional credit, we're assuming (in this particular
    discussion) they'd have a liquidation bankruptcy (chapter 7).
    Isn't it possible, perhaps even likely that they'd
    reorganize under chapter 11?

    I still feel that a
    liquidation BR would be handled very innefficiently by the
    banks. At that point, they just want it over. Take the
    write-off and move on. Understand that my argument cannot
    be defended quantitatively. But I have sat on a
    number of creditor's committees and watched those morons
    operate.

    You seem to be envisioning a process that is orderly
    even if it takes several years to complete. Even if
    you could sell off a prison every month or so you
    never get the banks/bonds paid off in full because
    their 10% and 12% interest charges continue to build
    up.

    Hell, wouldn't surprise me to see an investment group
    headed by Doc willing to pay the banks 50 cents on the
    dollar for those mothballed prisons. Stranger things
    have happenned.

  • Reply to

    The pref. A trading as if this firm

    by flipper_58 Jul 6, 2000 1:31 PM
    RetiredPaperman RetiredPaperman Jul 6, 2000 2:09 PM Flag

    No, I don't believe that in a liquidation
    scenario the proceeds from asset sales would even cover
    the bank debt, much less the bonds or Preferred
    stock. I think the bank feels the same way, otherwise
    they would have forced PZN into bankruptcy and
    proceeded with asset sales.

    I think the bank made
    the difficult decision that it was smarter to invest
    more money into the enterprise in hopes that they
    would survive. The prisons have value only to the
    extent that they generate cash flow.

    Why couldn't
    they be sold? A few might be, but the short answer is
    that there simply is no market for used prisons that
    probably are not built to the required Federal/State specs
    and are scattered randomly throughout the US. It
    would take years to dispose of the few prisons that
    might ever be sold.

    Yes, in theory there is
    great demand for these prisons. But that same theory
    should have resulted in PZN's prisons never falling
    below 90% occupancy.

    I believe the only rational
    way to play the common or preferred is to assume that
    six months from now they'll either be at zero value
    or 3x their present value and invest
    accordingly.

    To buy the preferred instead of the common because
    there might be something left over after
    liquidation...I just can't get there.

  • Reply to

    litigation expense could exceed ins.

    by brucedgaither3 Jul 6, 2000 11:00 AM
    RetiredPaperman RetiredPaperman Jul 6, 2000 1:26 PM Flag

    Per earlier posters, Dreman wants a completely
    independent Board and outside professionals to run the
    company.

    So, days after Dreman's pronouncement, Doc announces
    his resignation from the Board and Brendy tells us
    we'll probably have a new CEO in a month.

    Sounds
    like Dreman's getting his wishes but we'll have to
    wait a bit longer to confirm.

  • Reply to

    litigation expense could exceed ins.

    by brucedgaither3 Jul 6, 2000 11:00 AM
    RetiredPaperman RetiredPaperman Jul 6, 2000 11:49 AM Flag

    nottokyojoe,

    I viewed Dreman's statement
    as merely jockeying for position. If Dreman had
    determined that his investment decision was a bad one, he
    would begin to quietly liquidate the holding, not bash
    it in public. Instead, I think he holds out hope for
    PZN and appears to not be shy about utilizing a
    public forum to influence PZN management.

  • Reply to

    bloomberg link

    by ugadawg_98 Jul 1, 2000 1:12 PM
    RetiredPaperman RetiredPaperman Jul 5, 2000 2:14 PM Flag

    How many brokers did you use to move your 14 shares?

  • Reply to

    Interview

    by coloranch Jun 9, 2000 10:26 AM
    RetiredPaperman RetiredPaperman Jun 9, 2000 1:48 PM Flag

    I agree with your assessment of Wayne's Squawk
    Box appearance. I bought in the 40's after P&G's
    previous blow-up but sold (too early) in the low 50's.
    Hoping for pull back to the low 50's but it doesn't
    appear likely.

    Seems like the very weak euro
    should really be hurting earnings out of Europe but
    perhaps they are hedged or "making it up elsewhere". Good
    luck.

  • Reply to

    Apologies or not,

    by realtimequote May 4, 2000 7:43 AM
    RetiredPaperman RetiredPaperman May 5, 2000 2:04 PM Flag

    I just taped your post to my frig. Nice comments.

  • Reply to

    I still expect to make millions...

    by bigman_herb May 4, 2000 10:50 AM
    RetiredPaperman RetiredPaperman May 4, 2000 12:30 PM Flag

    has nailed this thing at every turn and he's never lied.

  • Reply to

    want someones opnion

    by blade9329 Apr 4, 2000 11:54 PM
    RetiredPaperman RetiredPaperman Apr 5, 2000 10:39 AM Flag

    off on the common. If a potential investor is
    itching to get involved now, believes that ultimately
    things will work out and doesn't want to mess with the
    rights offering, why not just buy the Preferred today at
    $8 for a 25% yield?

    I'm not doing anything
    right now but if I was I'd buy the Preferred. If a
    person doesn't think the Preferred is a fantastic buy at
    $8 then they should run from the common.

  • Reply to

    Pacific Life says still in talks.

    by Reitmaster_98 Apr 3, 2000 11:19 AM
    RetiredPaperman RetiredPaperman Apr 3, 2000 4:48 PM Flag

    I completely agree with the most important part
    of your point which is that offering Preferred is
    the best way to go.

    I agree that there is no
    guessing the stock price. Heck, at one point today PZN
    lost about 1/3 of it's value for probably no real
    reason.

    I'm more concerned about the yield on the existing
    Preferred. That's a bit scary.

  • Reply to

    Pacific Life says still in talks.

    by Reitmaster_98 Apr 3, 2000 11:19 AM
    RetiredPaperman RetiredPaperman Apr 3, 2000 3:11 PM Flag

    I agree that issuing Preferred probably makes the
    most sense, but that's because it's their only
    realistic options.

    However, the balance of your
    analysis is incorrect because you neglect to include the
    "ex-dividend" effect on the common. I'll try to briefly
    explain, but if I've got it wrong I'd certainly appreciate
    someone helping...First of all I'm in a marginal bracket
    of about 46% including State, so effectively from a
    $2.20 Preferred issuance I receive after-tax value of
    $1.19. Then, given the way the current Preferred is
    trading, you could cut my $1.19 in half again after the
    market puts a true value on it. So I got taxed on $2.20
    and might own something worth $.60.

    Now for
    the part I think you missed...You have to own the
    Common to get the Preferred. Once the ex-dividend date
    hits, the Common should theoretically trade down.
    Theoretically it will reduce by whatever real value the
    Preferred is worth. If we agree the $2.20 Preferred is
    worth $1.20, then the Common MIGHT trade down by
    $1.20.

    So net-net, my common went down $1.20 and I got
    preferred worth less than that.

    I'm not suggesting
    that any of my specific numbers are correct. I'm
    simply trying to outline the concept.

    There still
    are no free lunches. If the Preferred is really worth
    something, then the common's value will reduce accordingly.
    If the Preferred isn't worth much, then you're not
    really getting much.

  • Reply to

    Pacific Life says still in talks.

    by Reitmaster_98 Apr 3, 2000 11:19 AM
    RetiredPaperman RetiredPaperman Apr 3, 2000 12:45 PM Flag

    Almost every company that goes BR does so because
    they've run out of cash. The banks (or whomever is
    financing them) finally just throws in the towel and
    attempts to recover x cents on the dollar. It doesn't
    matter if they're a leader, if there's equity there, or
    anything else. When there's no cash in the checking
    account you can't pay the bills. Ultimately either your
    lenders or unsecured creditors will push you into BR once
    their payments are far enough behind.

    PZN's
    primary expenses are interest and salary. If PZN begins
    having trouble making payroll, the game will end
    quickly. More likely would be defaults on
    principle/interest.

    IMO, it's all about timing. A combined PZN/OPCO makes
    economic sense assuming occupancy gets better. The real
    challenge is surviving the next 2 to 3 months. The BOD
    needs to pick a Partner and get the ball rolling on the
    financial engineering before we run out of cash or access
    to cash.

    I continue to believe PZN Won't go
    into BR because nobody benefits. However, the banks
    will only stretch so far.

    Of particular concern
    to me is PL's plan to retain REIT status by paying
    the dividend in Preferred Stock. As MK alluded to
    before, what's going to happen to a $2.20 valued
    Preferred stock (that is fully taxable to shareholders)
    while the existing preferred is yielding 22.2% as I
    write this? I'm not suggested this isn't the best
    option but even so, it's beginning to stink. I sure
    don't want to pay 46% taxes on a $2.20 dividend and
    then have that preferred stock immediately be worth
    less than $1.

    As a potential investor, I find
    myself doing what MK suggested others will do. Waiting
    and watching with the plan being to possibly buy into
    the story AFTER the plan is enacted.

  • Reply to

    10K is Out

    by somebodyelse00 Mar 30, 2000 7:14 PM
    RetiredPaperman RetiredPaperman Apr 3, 2000 1:33 AM Flag

    My guess is they'll make it but the stock price
    probably hasn't seen it's lows. They won't file BR because
    nobody wins (nobody includes: Doc, PZN, CCA, Banks,
    Bondholders and Customers). The price will probably drift
    lower over concerns flipper discussed (rights, shorts,
    etc.). Again, just a guess as I don't follow closely
    anymore.

  • Reply to

    Trend.

    by TKF07 Mar 23, 2000 6:40 AM
    RetiredPaperman RetiredPaperman Mar 28, 2000 8:18 AM Flag

    so (fortunately)I wasn't able to follow through
    on my plan to buy more FLO at $14. Looks like not
    much has changed. KBL stock price seems to still be
    the driver with FLO being the unwilling
    passenger.

    My Food Stock Portfolio (watch only!) recovered
    nicely and is now back in the tank. IBP made a nice move
    but retreated. SLE shot themselves in the foot again.
    Gotta figure out that lysteria thing. Dean Foods
    misses, Campbells misses. Conagra hits the number and
    sells off. Still messy out there.

CXW
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