GEO - GEO Group: Now Teetering On The Edge Of Bankruptcy As A Prisoner To Their Debt

• The shareholders of GEO Group have endured a terrible ride during the last twelve months with their dividends being completely suspended.
• Now Standard & Poor's have downgraded their credit rating even further into the junk territory and warned of a debt default, which is essentially tantamount to bankruptcy.
• Although it would be tempting to assign blame with the new Biden administration and their plans to phase out federal use of private prisons, their leverage was already unsustainable.
• Considering the long and questionable path forward with deleveraging through free cash flow, it seems likely that they will seek to restructure by converting debt to equity.
• It does not bode well for their shareholders that not a single member of their management has purchased any shares during the last twelve months and thus I believe that a bearish rating is appropriate.

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