BY ÁLVARO SÁNCHEZ
MADRID - Shares in GEO Group and CoreCivic, the two largest publicly traded US prison groups, are rising sharply on the prospect of an increase in the penitentiary population and the number of migrants detained under the Republican administration
If there was one industry that was particularly interested in the U.S election results, it was that of private prisons. The economic effects of Donald Trump’s return to the White House will be widespread, but in the case of this sector, which lives off public contracts to accommodate the excess prison population — and is eagerly awaiting becoming a detention center for the millions of undocumented immigrants that the president-elect has promised to deport — the difference between a Democratic victory and a Republican triumph was something akin to the distance between staying afloat and striking it rich.
This is how investors interpreted it: in the summer, when the assassination attempt on Trump took place, the two main American private prison corporations, GEO Group and CoreCivic, rose on the stock market because it was understood that the shooting strengthened the Republican candidate and brought him closer to victory. Once the polls closed and it became clear that the results were good news for the Republicans, the explosion came: shares in the two companies shot up, closing the first post-election session with gains of 42% and 29% respectively.
Those numbers, which are very unusual for a single day, have continued since, unleashing something approaching euphoria among senior executives, who talk of increasing capacity to millions of inmates if necessary. “GEO Group was created for this unique moment in our country’s history and the opportunities it will bring,” said George Zoley, the firm’s chief executive, as an offer to Trump.
According to a report by the NGO The Sentencing Project published last summer, the prison population in private prisons in the U.S. is around 8% of the total. That is, almost 100,000 inmates live in cells in for-profit penitentiaries. The figure is drawn from adding those detained under federal jurisdiction to those from 27 other states, while in the remaining 23 states private prisons are not used to house inmates. To this number should be added a further 16,000 people detained by immigration services.
The prospects with Trump at the helm are very different. In a return to the past that few anticipated, private prisons have become an object of desire for the markets, with a revaluation that, in the case of GEO Group, is close to 90% in a month, and in the case of CoreCivic, 60%. The stock market capitalization of the former is already close to $4 billion, and that of its rival, $2.5 billion. This vertiginous advance, accentuated since the elections, has made these corporations appear — along with bitcoin, the dollar, oil companies, or Elon Musk’s Tesla — on the list of the big winners of a Republican government.
