2024-11-07 15:51:00
Donald Trump’s anti-migration speech pushed investors to snap up the shares of this company specializing in the detention of undocumented immigrants.
The misfortune of one person makes the happiness of others. The adage is known and confirmed. During his campaign, Donald Trump constantly promised a merciless war on illegal immigration. A threat for the millions of undocumented immigrants who work in the United States but a boon for the private group GEO which has made the retention of immigrants its business. And investors are not mistaken. The company listed in New York saw its share price jump 42% after the results of the American election on Tuesday, November 5.
Over the past three decades, the federal government has largely outsourced the detention of undocumented immigrants to private prison companies. Under Donald Trump’s first term, the United States Immigration and Customs Enforcement (ICE), the federal agency in charge of border policing, the budget allocated to border defense increased by 50%. In particular, 40 contracts were signed for the construction of new detention centers, mainly on the border with Mexico. And the trend should not be reversed with this new mandate. As soon as the results of the election were published on Wednesday, November 6, Karoline Leavitt, Donald Trump’s press manager, insisted again by affirming that the 47th American president would launch from the first day of his mandate the “largest mass expulsion operation» of undocumented immigrants.
This determination would do business for GEO Group. In 2022, the company, which already owns around fifty detention centers, achieved $1.05 billion in revenue thanks to contracts with ICE alone, or 43.9% of its total turnover (2.4 billion dollars). And to be sure to get a lion’s share, GEO Group has pulled out all the stops. Under the Trump administration, the company spent more than $6 million on federal lobbying fees before scaling back during Joe Biden’s term. Since the start of the campaign in January 2024, GEO has handed over its portfolio to support the Republican candidate to the tune of 690,000 dollars (approximately 640,000 euros) according to figures revealed by the NGO OpenSecrets. An investment that could well bear fruit if Donald Trump keeps his promises.
1730995493
#private #prison #manager #jumps #stock #market #Donald #Trumps #victory
**Interview with Industry Analyst Sarah Lincoln on Recent Movements in Prison Stocks**
**Interviewer:** Thank you for joining us today, Sarah. We’ve just seen some significant movements in the stock prices of GEO Group and CoreCivic, especially after Donald Trump’s recent anti-migration speech. What do you make of these developments?
**Sarah Lincoln:** Thank you for having me. Yes, the recent surge in share prices for GEO Group, particularly a 42% jump following the election results, is quite striking. It reflects investor optimism surrounding policies that lean towards increased detention and enforcement of immigration laws—something that Trump has historically championed.
**Interviewer:** It’s interesting to see how political rhetoric can influence stock prices. Can you elaborate on how this specific speech has impacted GEO Group’s business model?
**Sarah Lincoln:** Absolutely. GEO Group’s business model revolves around the detention of undocumented immigrants. The more stringent immigration policies are, the greater their potential client base becomes—in this case, federal contracts for detention facilities. Investors likely see Trump’s speech as a signal of a potential ramp-up in these policies, and thus an increase in profitability for GEO Group.
**Interviewer:** Meanwhile, we see that CoreCivic moved its guidance in the opposite direction. What factors might be contributing to this divergence between the two companies?
**Sarah Lincoln:** That’s a good question. While both companies specialize in private prison operations, their strategies and operational focuses may differ. CoreCivic might be more exposed to potential regulatory shifts or could have a different outlook on long-term contracts with the government. It’s also possible that the market is recalibrating based on differing investor sentiments or risks perceived in their businesses.
**Interviewer:** What do you foresee for the future of these companies, especially given the recent political landscape?
**Sarah Lincoln:** The future will likely depend on ongoing political developments and public sentiment towards immigration. If Trump’s policies gain traction, we could see more growth for companies like GEO Group. However, there remains a risk of regulatory pushback from advocacy groups and changing political winds. Investors should keep a close eye on policy shifts and public opinion, as they can significantly impact these companies moving forward.
**Interviewer:** Thank you, Sarah, for your insights on these developments. It will be interesting to see how the situation unfolds as we approach 2024.
**Sarah Lincoln:** My pleasure! It’s definitely a dynamic and evolving situation worth watching.
