Why is Target Hospitality (TH) stock down 37% today?

Source: boby.e/

Destination hospitality (NASDAQ:TH) the company’s shares are falling sharply on Tuesday after the company announced its planned termination of its services agreement with the South Texas Family Housing Center.

According to a company press release, the U.S. government plans to terminate its contract with Target Hospitality at this location. This means that the contract will expire in 60 days, i.e. around August 9, 2024.

Target Hospitality provides services to this location under a lease and services agreement with partner Family Residential Center of South Texas. CoreCivic (NYSE:CXW) is an entity with which the United States government is terminating a contract.

Target Hospitality notes that it will provide investors with more information on the impact of this situation on the company by the end of the month. This will include the operational and financial impact on its business.

TH stock movement on Tuesday

TH shares fell on Tuesday, with more than 320,000 shares of the company changing hands. This caps out at an average daily trading volume of approximately 587,000 shares.

TH shares fell 36.7% on Tuesday morning. This eliminates the stock’s 6.9% gain seen year-to-date when markets closed yesterday.

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As of the date of publication, William White did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to Publishing guidelines.