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    • Why Tennessee’s CoreCivic Shares Soared After Trump’s Re-Election
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    Why Tennessee’s CoreCivic Shares Soared After Trump’s Re-Election

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    Shares of Brentwood-based private prison company CoreCivic rose the re-election of former President Donald Trump on November 5. The value rose again on Monday when Trump appointed the former US Immigration and Customs Enforcement official. Tom Homan to oversee border control once he takes office on January 20, 2025.

    Despite a federal investigation into claims of civil rights violations at the CoreCivic Trousdale Turner Center in Tennessee, owned by CoreCivic, the market’s outlook on the company improved on Election Day.

    Before the election, CoreCivic shares on the New York Stock Exchange were valued at around $13.19, and by November 11, they were up 81%. That peak was $23.94 per share the day Homan took over as “frontier czar.”

    Share prices now hover between $21.50 and $22, the range they rose to after Trump’s victory. This marks a 69% increase from the pre-election figure and a 41% increase over the past six months.

    CoreCivic and Florida-based corrections company Geo Group are the top two private prison firms in the country. Geo Group shares have also seen a considerable increase in value since the presidential election.

    While it’s yet to be seen exactly what role CoreCivic and its facilities will play over the next four years, Trump promises to step up deportations of illegal immigrants could lead to profit gains for the private prison industry that houses inmates.

    Here’s what you need to know about CoreCivic’s business model, current financial situation, and how it could capitalize on the rise in illegal immigration detention.

    How is CoreCivic connected to US immigration?

    CoreCivic owns, operates and leases correctional facilities in the United States. Its partners include federal, state and local governments, but its largest partner is US Immigration and Customs Enforcement, or ICE.

    ICE is a federal agency within the Department of Homeland Security charged with enforcing immigration laws both near the borders and throughout the country. This can lead to operations such as arrests of immigrants with terrorist ties at the beginning of this year or poultry factory raids in 2018 and 2019 which detained hundreds of immigrants in Tennessee and Mississippi.

    Each year, ICE detains hundreds of thousands of immigrants. While some are held in detention centers owned and operated by ICE, most are in private facilities like those belonging to CoreCivic.

    During the third quarter of fiscal year 2024, from July to September, CoreCivic’s revenue from ICE was $139.7 million.

    What does CoreCivic expect from the Trump administration?

    Two days after the presidential election, on Nov. 7, CoreCivic President and CEO Damon Hininger led the company’s quarterly call to discuss financial performance and the potential future impact of Trump’s re-election.

    In short, Hininger said the company’s future is bright and it’s preparing for a potentially massive increase in demand for detention beds nationwide.

    “It looks like with this election this year, we’re heading into an era that we really haven’t seen, maybe only once or twice in the history of the company,” Hininger said. “The private sector value proposition for both our state partners and our federal partners will not only be strong today, but even stronger as we move into the next two years.”

    This year, the number of detention beds used by ICE has ranged from about 39,000 in early March to just over 37,000 in the most recent data released in September. Talk of an increase in detention began before the election, as both the White House and congressional candidates made immigration and border security a central issue.

    Hininger said the number he heard floated over the summer was 50,000, but now “it appears to be a floor” because Republicans will control the White House, House and Senate.

    “How we’re addressing that we have about 18,000 vacant beds in our system, and that includes our beds that we have available in Dilley, Texas,” Hininger said. “So we are taking proactive steps and working on an activation plan. and make available every bed we have in the enterprise.”

    The company says its lobbying policy is “not to advocate for or against legislation that serves as the basis for or determines the length of a person’s detention.”

    What is CoreCivic doing in Tennessee?

    In addition to being headquartered in Tennessee, CoreCivic operates four prisons in the state: Trousdale Turner Correctional Center, South Central Correctional Center, Hardeman County Correctional Center and West Tennessee Detention Center.

    At the beginning of this year, The US Department of Justice has launched a civil rights investigation on terms at Trousdale Turner, incl problems with understaffing, drug overdoses, and inappropriate sexual behavior.

    In August, Tennessee fined CoreCivic $15 million for failed contracts, but this week the Tennessee Department of Corrections requested a $6.8 million increase in its annual budget to go toward its contract with CoreCivic.

    How much money does CoreCivic bring in?

    The company has annual revenues of nearly $2 billion.

    Just over half of that comes from federal partners like ICE and the US Marshals Service, according to Hininger.

    While ICE revenue was down slightly in the third quarter, Hininger said that was due to the closing of the South Texas Family Residential Center in Dilley, Texas. The ICE detainee population in CoreCivic facilities also increases by 5 percent in October, Hininger said.

    “While the uncertainty stirred in the election year may have slowed some purchases, the underlying need for more beds exists,” he said. “CoreCivic is ready to help solve the problems of federal, state and local government agencies to help address their various challenges in the short and long term.”

    Hadley Hitson covers business news for The Tennessean. She can be reached at [email protected]. To support his work, subscribe to The Tennessean.

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