The U.S. government will begin phasing out its use of private prisons, and shares of two major private prison companies are crashing on the news. Two of the largest for-profit jailers, Corrections Corporation of America and GEO Group lost more than 35 percent of their value Thursday after the Department of Justice decided to phase out its use of private prisons, just days after the U.S. Justice Department’s Inspector General reportedly found that for-profit prisons “incurred more safety and security incidents per capita than comparable BOP institutions.” The D.O.J.’s goal is “reducing—and ultimately ending—our use of privately operated prisons,” Deputy Attorney General Sally Yates said in a memo first reported by the Washington Post.

“They simply do not provide the same level of correctional services, programs, and resources.”

The report concluded that private prisons were more dangerous than prisons operated by the Federal Bureau of Prisons, and that private prisons had higher incidents of violence and inmate contraband than state-run facilities. While Wall Street reacted immediately, causing related stocks to take a dive, at least some analysts believe the reaction is overblown. “The massive falloffs in the stocks imply that the risk will spread to other federal, state and local jurisdictions,” Ryan Meliker, an analyst at Canaccord Genuity, told CNBC. “While this is possible, we believe it is unlikely.” Others noted that there are only 13 private prisons run by companies like Corrections Corporation of America and GEO Group, and that state, immigration, and other contracts won’t be affected. Several for-profit prison companies, like LaSalle Southwest Corrections and Emerald Correctional Management, are private companies.

The move to decrease the government’s reliance on for-profit prison companies is part of a larger push by the Obama administration to reform the criminal justice system, including commuting sentences for non-violent offenders and reducing the overall incarceration rate, which is the highest in the world. In her memo, Yates acknowledged that for-profit facilities served an important purpose while crime rates were higher, but that it was time to change the D.O.J.’s approach. “They simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and as noted in a recent report by the Department’s Office of Inspector General, they do not maintain the same level of safety and security,” the deputy attorney general said. Most prisoners in the U.S. are held in state-run facilities, with only about 12 percent of the U.S. inmate population held in private, for-profit prisons. Yates says that for-profit facilities will house just 14,000 inmates—down by more than half—by May 2017.