Why CoreCivic Stock Fell 10% at the Open Today
Shares of real estate investment trust CoreCivic (NYSE: CXW) fell roughly 10% in the first half hour of trading on April 7. While there was news out of the company, it was likely the news out of competitor The GEO Group (NYSE: GEO) that put investors in a selling mood.
Both CoreCivic and The GEO Group own and operate prisons. The current administration in the White House has taken a dim view of for-profit companies running these facilities and has ordered the Department of Justice to stop using them. While that's only a portion of the customer base for both names, the decline has already started to show in contracts with the Federal Bureau of Prisons and U.S. Marshals Service being canceled or expiring without renewal. And The GEO Group announced today that it is suspending its dividend so it can pay down debt -- there's probably a link. There is a dark cloud lingering over the for-profit prison space, and this announcement made investors just a little more worried than they were before.
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Source Fool.com
