Corrections Corporation of America
Trading in both stocks at the moment is highly volatile, so these numbers are likely to change significantly by the day's end. But they signal that investors are worried about the long-term viability of these companies.
It's important to note, however, that the Justice Department's announcement only affects federal prisons. Many states contract with private prison companies too, and those relationships are unaffected.
It's also worth pointing out that the Justice Department's move was largely unexpected. In a June 8 call with investors, the CEO of Corrections Corporation of America assured investors that "I think we’ll be just fine" regardless of who wins the White House in November.
"I think about the next president, whoever that is, if it’s Hillary Clinton or if it’s Donald Trump, there’s going to be so many things that he or she are going to have to deal with next year or next administration, both nationally and internationally, that I think having a view on our business, our industry is going to be really, really low on the priority list,” CEO Damon Hininger said at the time.
If today's decision is any indication, it's likely that private prisons were higher up on federal priority lists than Hininger had expected.