June 21, 2021 22:29

Private Prison Stocks Fall After Biden Win

Private prison companies have taken a financial hit in the past week as President-elect Joe Biden’s win became apparent. Stock prices for the two largest prison companies, the GEO Group and CoreCivic, have fallen 14 percent and 19 percent respectively since Election Day, Mother Jones reports. Biden’s campaign platform, like Hillary Clinton’s in 2016, promised that he would end the federal government’s use of private prisons. That’s a serious threat to both GEO and CoreCivic, which depend on federal contracts with the Bureau of Prisons (BOP), Immigration and Customs Enforcement (ICE), and the U.S.Marshals Service for more than 50 percent of their revenue.

Private prison investors are adept at reading the political winds. Their consensus is that a Democratic president is bad news. In the summer of 2016, the Obama administration’s decision to end BOP contracts sent prison stocks plummeting, and they sagged for months as Clinton appeared to be the likely election winner. Donald Trump’s victory caused their share prices to soar. The industry benefited as the new administration detained tens of thousands of immigrants and imposed hardline immigration policies such as family separation, which that caused Democrats to turn against both ICE and the prison industry. Private prisons did not hold children taken from their families, but they did hold their parents, as well as families detained together. JP Morgan and seven other banks, as well as the largest public pension fund, announced in 2019 they would divest from the prison industry. Stock prices for both companies have been falling ever since, and have kept falling as policies to stem the spread of COVID-19 have led to reductions in prison populations. California, Nevada, Minnesota, and Colorado have recently passed or are considering private prison bans.

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