Prison shares rise as U.S. eyes more migrant family detention space
By Sinéad Carew and April Joyner
June 22 (Reuters) - Shares in private prison operators
CoreCivic Inc and Geo Group rose on Friday as
investors bet on increasing demand for their services after U.S.
authorities asked about available capacity for the detention of
The U.S. Department of Homeland Security's office of
Immigration and Customs Enforcement (ICE) issued a request for
information on Friday afternoon about potential facilities from
different providers to accommodate up to 15,000 beds, ideally in
The move came after U.S. President Donald Trump issued an
executive order on Wednesday aimed at ending his controversial
policy of separating immigrant children from their parents
caught entering the country illegally.
Under the order, which is likely to be challenged in court,
families will now be detained together for the duration of their
criminal and immigration proceedings. The latter can take months
or even years to complete.
Shares in CoreCivic closed up 3.95 percent at $23.39, a
nearly five-month high, in an unusually active trading day on
Friday. The stock has jumped 11.2 percent in the last four days.
Rival Geo, which has gained 6.6 percent since Trump's
executive order was issued, closed up 1.6 percent at $26.48, in
a fifth straight day of gains.
The Oklahoma Board of Corrections is due to meet on Tuesday
to discuss approval of a contract with Geo for its Lawton
Correctional Facility, according to a notice on its website,
With ICE potentially looking for more beds, states are
likely feeling pressure to accelerate such contract decisions
said Jamie Cuellar, portfolio manager for Buffalo Funds in
"It's more and more demand that continues to get snapped up,
so states will be forced to get off the sidelines and get
capacity under contract before it goes elsewhere," he said.
Immigrant families are currently housed in facilities in
Pennsylvania and Texas that have a total capacity of about 3,300
beds and are now at 79 percent capacity, according to ICE.
The U.S. military has been asked to prepare to
house up to 20,000 immigrant children.
Trading volume in CoreCivic shares was more than three
times the 10-day moving average on Friday. Geo trading volume
was 1.7 times the 10-day moving average.
Geo and CoreCivic were not immediately available for
(Reporting by Sinéad Carew
Editing by Tom Brown)
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