Two of the nation’s largest private prison companies, the GEO Group and CoreCivic, have been experiencing a fluctuation in their stocks over the past few months. Following the announcement by the Department of Justice (DOJ) last August saying they would begin phasing out the use of private prisons, stock in those private companies dropped dramatically. It seemed that private prison companies were on the decline and would soon lose a large source of their profit.
Then Donald Trump was elected President. Running on a platform of “law and order” and an increase in immigration enforcement, his election seemed a boon to private prison companies. After the election, stock in private prison companies soared, with stock in CoreCivic increasing by 34% while the GEO Group saw an increase of 18%.
According to the Motley Fool, sentiment is changing as investors believe that the president will be ineffective in pushing policy, and the thought of his possible impeachment during his term. This has led investors to move away from private prison companies, with stock in CoreCivic dropping by about 12%. The GEO Group saw their stock drop by about 9%.
While it is hard to determine what will happen next, dropping stocks can only be a good thing as we try to move away from private prisons and the companies that operate them.