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Title 42 ending =Burry's prison stock $GEO up 10%
Free write up on what this means for $GEO
For whatever reason the Geo Group, Burry’s largest holding continues to make headlines. Maybe because its a polarizing prison stock? Or maybe because Burry has historically been very bullish on it when it’s in the $7 range? By fate or by chance, when $GEO fell back into his range, another bullish catalyst comes out.
Make no mistake: Burry’s portfolio in Q1 hasn’t been the best. Not only is he down on $GEO, he’s also down on $QRTEA, $BABA, & $JD . Yet, things may be improving. Today $QRTEA rocketed 27% and $GEO, the focus of this article, popped 10%.
Because of the importance of the news regarding Title 42 and GEO, this quick write up is to let everyone know why the bottom may be in for the prison company $GEO. For our premium paying clients, expect a much more detailed report on what may happen to $GEO after May 11th to be sent out on Wednesday of this week.
Title 42, a law that gave authorities the power to prevent migrants from entering the US, is expected to end on Thursday, May 11th. News media is already reporting that 15,000+ migrants have already gathered outside of El Paso, TX in anticipation of the title expiring. The Biden Administration even has been on the record saying they anticipate 13,000+ net new migrants to cross the border every day after May 11th.
Now, keeping politics out of it, why would that be bullish for $GEO? As we’ve shared before, The Geo Group is an owner and operator of for-profit private prisons with over 50,000 beds and manages 100 facilities in total. When Wall Street caught wind of the title expiring, it didn’t take long to put the pieces together.
With the anticipated large influx of migrants, many investors on wall street appear to see that as a bullish signal for “For-profit prisons”. This most likely is why $GEO was up 10% today.
Couple this bullish news with the following, and you should realize why the opportunity in GEO may be here (and why you should subscribe to our next premium post to come 😉)
Short interest on $GEO is over 20% - Short squeeze anyone?
$GEO is down 23% YTD - not near it’s highs
A short term base appears to have formed in the $7.25/share range
Burry initially opened his $GEO position in the $7.50/share range
I’ve been a long time copy trader of Burry and am excited to see where we go from here. Also his filings come out next week so things are about to get busy.
For our premium paying clients, be on the look out for the update coming soon!
Chris - co founder of Autopilot