Private Prison Stocks Sink After U.S. Signals the End

The U.S. Justice Department halted a decade-long experiment of hiring private companies to help manage the soaring prison population, sending shares of facility operators Corrections Corp. of America and GEO Group Inc. plunging.

Corrections Corp. fell 35 percent to $17.57 at the close of trading, the real estate investment trust’s biggest drop since its initial public offering in 1997. GEO Group plummeted 40 percent to $19.51, also the largest decline in its 22-year history as a publicly traded company. The stocks pared losses of about 50 percent as analysts said the impact may be less severe than initially expected. Corrections Corp. climbed to $18.85 in after-hours trading after saying that today’s decision relates to facilities that represent just 7 percent of its business. GEO Group rose to $20.72.