The United States may be getting a whole new batch of for-profit prisons in the second return of the Trump era, if social media is to be believed.
This news came at the behest of Trump’s election, wherein on Wednesday, shares of Florida-based for-profit prison firm, The GEO Group, Inc. (NYSE: GEO) climbed by approximately 40 per cent.
Investors are betting on stricter immigration policies under a potential Trump administration, with many on social media expressing anticipation that a Trump victory would lead to increased immigration enforcement. This expectation has boosted demand for private detention facilities operated by companies like GEO Group, driving the company’s stock up, with some posts predicting an increase of up to 39 per cent.
It’s since passed that mark.
During his previous term, Donald Trump implemented policies that benefited private prison companies, including promises of large-scale deportations and the construction of new detention centers. Investors seem to be reacting to these past policies and the current political climate, anticipating similar or even more aggressive actions if Trump returns to office.
Recently, GEO Group has secured contract renewals and new agreements, such as a five-year contract with ICE for air operations support services. These contracts ensure steady revenue and indicate a strong business pipeline, contributing to positive investor sentiment.
Additionally, options trading volume for GEO Group has surged, signaling increased speculative interest in the stock’s movement. A 400 per cent spike in options trading volume, as noted on social media, reflects market speculation that demand for GEO’s services will rise.
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For-profit prisons could benefit under Trump presidency
GEO Group has been actively engaging in public relations and policy advocacy, including making significant donations to pro-Trump groups. By aligning itself with political figures who promise policies that could benefit the company, GEO appears to be positioning itself to secure future business, which investors may view as a strategic move.
The broader economic sentiment, particularly regarding how different industries might fare under various political leaderships, also influences investor behavior. With Trump’s “law and order” narrative, sectors tied to security and enforcement, such as private prisons, could attract more investment.
These factors have contributed to the surge in GEO Group’s stock price. However, it’s important to remember that stock movements can also be influenced by broader market trends, shifts in investor sentiment, and sometimes market overreactions to news or political events.
While these reasons stem from current online discussions and recent company announcements, the stock market is subject to many other variables not explicitly addressed here. Always approach such information with caution, understanding that market speculation can drive short-term gains but may not reflect long-term business health or ethical considerations.
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Geo Group produces ESG report
Perhaps it’s merely a happy coincidence, but The Geo Group also published its sixth annual Human Rights and Environmental, Social & Governance (ESG) report on Wednesday.
The report includes enhanced disclosures on board oversight of human rights and ESG matters, employee diversity and training programs, corporate governance, and environmental sustainability.
It also presents updated metrics and statistics for the calendar year 2023, following the universal standards of the Global Reporting Initiative.
The report also emphasizes GEO’s commitment to providing enhanced rehabilitation and post-release support services through its award-winning GEO Continuum of Care (CoC) program.
In 2023, CoC facilities delivered approximately 4.6 million hours of enhanced rehabilitation programming. The CoC program combines enhanced rehabilitation and reentry programming, including cognitive behavioral treatment, with post-release support services to meet basic community needs of released individuals, such as housing, transportation, food, clothing, and job placement assistance.
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