During this presidential election, probably more so than ever before, politicians, social media and the stock market are deeply entwined. By a candidate simply tweeting out a thought, it may have consequences not only for the campaign, but for the companies listed on the nation’s stock markets as well.
This interconnection was most recently illustrated when Hillary Clinton tweeted out her views on America’s prison system.
According to the American Civil Liberties Union (“ACLU”), the United States represents only 5% of the world’s population but holds 25% of the world’s inmates. The ACLU states on its website that, “The ‘tough on crime’ politics of the 1980s and 1990s fueled an explosion in incarceration rates. By the close of 2010, America had 1,267,000 people behind bars in state prisons, 744,500 in local jails, and 216,900 in federal facilities—more than 2.2 million people locked in cages.”
And Clinton has something to say about those statistics. On Friday, Clinton tweeted out that the United States needs to “end the era of mass incarceration.” She further tweeted that, “We need to end private prisons. Protecting public safety . . . should never be outsourced or left to unaccountable corporations.” The comments were taken from a speech she made in Atlanta discussing the criminal justice system of America.
Clinton’s tweets obviously had an effect as her comments swiped millions of dollars from the value of the prison industry before the close of trading. Shares of Corrections Corp. of America dropped more than 6%, cutting the company’s value by about $200 million. The shares of GEO Group Inc. fell by 4.2%, resulting in the company losing about $100 million in value.
Friday’s commentary was not the first time Clinton has voiced concerns regarding private prisons. Earlier this month, Clinton’s campaign stated it would no longer accept donations from the private prison industry’s PACs and lobbyists.
And this is not the first time Clinton’s tweets have caused chaos for a particular industry. Earlier this month, certain biotech stocks plummeted after Clinton chastened Turing Pharmaceuticals for increasing the price of a drug by 50%. She tweeted that, “Price gouging like this in the specialty drug market is outrageous.”
It remains to be seen just how many industries Clinton’s social media rants will affect.