Shares of CoreCivic, Inc. (CXW), a private prison operator, surged 6.29% in the pre-market trading session on Tuesday. The stock's rally comes after President Donald Trump signed executive orders revoking the Biden administration's directive to phase out the use of privately operated criminal detention facilities.
Trump's move is expected to boost the demand for private prisons, benefiting companies like CoreCivic and its rival GEO Group (GEO). Trump's stance on immigration crackdown and the declaration of illegal immigration at the U.S.-Mexico border as a national emergency also signal potential increased need for detention facilities.
CoreCivic's shares have soared around 75% since Trump's election victory in November 2020, as investors anticipate a favorable policy environment for private prison operators under the new administration. The company's stock closed Monday at $22.91, and the pre-market surge has pushed it to around $24.59 at the time of writing.
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