Another Real Estate Stock Rides The Meme Rocket
The latest real estate stock to see its value pushed up unexpectedly as a so-called meme stock is a little less about Zelda and Link and a little more about slammer and clink.
The meme stock, which sees investors pour into a company spurred by trends on social media pointing out sizable shorting of the company's shares, rose to prominence when GameStop became one of the first such stocks.
The value of GEO Group, a REIT that specializes in private prison ownership, spiked from $6.36 per share on Wednesday morning to a high of $10.23 per share that afternoon. As of press time on Thursday morning, GEO Group had dropped to around $7.20 a share.
Very early in his term, President Joe Biden signed an executive order prohibiting renewals of any federal contracts with private prison operators. Federal contracts account for roughly half of the business for GEO Group and CoreCivic, the other major REIT that owns prisons.
In early 2017, GEO Group shares were worth as much as about $32. By the beginning of 2021, shares were trading for $8.86. In the interim, the company's model was hit by declining prison populations, then the coronavirus pandemic. This year, its share prices continued to decline until Wednesday.
Since its days in January as a meme stock, retailer GameStop's shares have remained elevated, though not as high as their peak. Before 2021, GameStop, whose retail model had been buffeted by online game sales, consistently traded for under $20 a share.
In January, shares spiked as high as about $347, crashing to about $40 by late February. Since then, investors have continued to take an interest. As of Thursday, GameStop was trading for about $258 a share.
On Wednesday, GameStop said the Securities and Exchange Commission had contacted the company on May 26 asking for voluntary production of documents and information related to the stock, MarketWatch reports.
Since earlier this year, the SEC has been investigating social media and message board posts for signs of fraud in the stock swings of GameStop and other companies that took a similar ride, such as AMC Entertainment Holdings.