Private Prison Stocks Surge On Trump Win

NEW YORK, (APP - UrduPoint / Pakistan Point News - 10th Nov, 2016 ) : Shares of private prison companies saw prices surge Wednesday on expectations President-elect Donald Trump will reverse the Obama administration's move to scale back use of these firms at Federal facilities.

Shares of Corrections Corporation of America and the GEO Group soared 48.1 percent and 20.8 percent, respectively, in afternoon trading after the surprise victory by Republican candidate Trump, who has said he favors the use of private prisons.

The gains are a reversal from August, when shares of the companies plummeted after the Justice Department announced it would stop renewing contracts with the private prison companies.

The goal was "reducing -- and ultimately ending -- our use of privately owned prisons," Deputy Attorney General Sally Yates said in a memo.

The department had found that private prisons were costly and more dangerous than those in public hands. The decision was expected to affect 13 privately run prisons housing just over 22,000 people, or about 11 percent of the federal prison population.

Most of those inmates are foreign nationals, mainly Mexicans incarcerated for immigration violations. Trump said during a public event in March that the US prison system was a "disaster" but private prisons "seem to work a lot better" than public institutions.