authors Stephen Elliott
Local private prison operator CoreCivic saw its stock drop Tuesday after President Joe Biden announced he was directing the Department of Justice to stop doing business with private prison contractors.
The order does not apply to Immigration and Customs Enforcement, from which CoreCivic gets the plurality of its annual federal dollars for operating immigrant detention centers.
“Private prisons profiteer off federal prisoners and are proven to be … to be less safe for correctional officers and for prisoners,” Biden adviser Susan Rice said. “President Biden is committed to reducing mass incarceration while making our communities safer. That starts with ending the federal government’s reliance on private prisons.”
Former President Barack Obama made a similar announcement in 2016, sending CoreCivic shares into a nosedive, though investor confidence recovered when President Donald Trump won the 2016 election.
New federal deals for CoreCivic and other operators were plentiful during the Trump administration, though the firm’s stock price has been on a steady decline as banks committed in recent years not to finance the company. CoreCivic reportedly turned to a Japanese bank for financing after major American banks, including JPMorgan Chase and Wells Fargo, abandoned the company, which was founded in Nashville in the 1980s. The company also stopped operating a detention center in Nashville this year after accusing city leaders of “playing politics.”
CoreCivic stock (Ticker: CXW) was trading down nearly 10 percent early Tuesday afternoon. Shares were trading around $6 — they were changing hands at more than $35 early in the Trump administration.
It wasn’t all bad news for CoreCivic leaders on Tuesday though: The company tweeted that CEO Damon Hininger and COO Patrick Swindle had received coronavirus vaccines at a company facility in Arizona, even as millions of frontline workers have yet to get theirs.