For years, activists have urged companies, pensions, and universities to divest from private prisons—with only limited success. But yesterday, when stocks of the two biggest private prison companies in the country fell more than 35%, might signal a new frontier in the divestment movement.
The companies, Corrections Corporation of America and the GEO Group, saw their respective stock nosedive after the Department of Justice announced it would phase out its use of private prisons, ending contracts as they expired and shifting inmates out of privately run facilities.
Executives of the two companies say they will see only a limited impact from the DOJ decision, and tried to reassure spooked investors in conference calls Friday morning. But activists say the huge falloff gives them a powerful new argument in favor of divestment.