Make Prisons Profitable Again

Paul Singer sees at least one growth prospect in the Trump economy.
Author:
Publish date:
By Federal Bureau of Prisons (http://www.bop.gov/locations/index.jsp) [Public domain], via Wikimedia Commons

By Federal Bureau of Prisons (http://www.bop.gov/locations/index.jsp) [Public domain], via Wikimedia Commons

What will President Trump mean for the U.S. economy? Nobody really knows. Marijuana, healthcare, natural resources, infrastructure and defense stocks seem pretty good bets. Oh yea, and private prisons: Given all of the vanquished presidential candidates, craven users of their First Amendment rights, Mexican rapists awaiting deportation and women having abortions who need to be behind bars, there’s never been a better time to be in the jail business. Paul Singer, who might be on Steve Bannon’s enemies list himself, knows this. And is profiting handsomely from it.

Last quarter, Singer’s firm Elliott Management placed bets worth approximately $100 million on two private prison stocks, GEO Group and CoreCivic, the company formerly known as Corrections Corporation of America. Today, Singer’s holdings in the jail operators are worth more than $150 million—a profit of more than $42 million and a return of almost 40% in less than two months.

Prison stocks broke out of their funk after the presidential election last week, as Trump’s victory assuaged fears that Hillary Clinton would shut down private prisons, something she’d suggested during her campaign out of public safety concerns. CoreCivic, then still called Corrections Corp., was the top-performing stock the day after the election, up nearly 50%, while GEO Group stock rose 21%.

Billionaire Paul Singer Wins Big on Prison Stock Trump Trade [Fortune]

Related