Currently one of my largest positions has an “event catalyst” in less than a two weeks. The event is the removal of Title 42 at the Southern Border of the United States and Mexico. If you are new to Grit Alpha please see the former two write-ups I published on Title 42:
Title 42 is a public health order issued more than three years ago during the Trump administration. It allows border authorities to quickly expel migrants without processing them for asylum on COVID-related grounds – an action taken more than 2.7 million times since March 2020.
If Title 42 is removed and we go back to the old rules, there will be a flood of individuals attempting to come into the United States. Any company that generated cash flows when Title 42 was not put in place should see a substantial increase in demand for a set period of time.
As I wrote just last week, border encounters are up 189% from 2019 and if Title 42 is lifted I estimate this company could generate $50-75mm of incremental EBITDA that is worth somewhere in the range of $500-750 million. The market cap of this company is under $1 billion!
The removal of Title 42 is a real catalyst and should the policy actually get removed this time around this company could generate substantial value for shareholders.
Over the next ten days I will be providing updates on Title 42 and tracking the policy as it is actionable. The links below are from various sources and all hyperlinked.
Now before we get into the Title 42 notes, a word from today’s sponsor…
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Notes on Title 42
“We are seeing a level of migration, not just at our southern border, but throughout the hemisphere that is unprecedented,” Department of Homeland Security Secretary Alejandro Mayorkas said. — There could be individuals coming in throughout all of or borders which would be substantial
The U.S. is opening new migrant processing centers in Latin America. Biden’s goal is to disincentivize them from coming to the land border irregularly, according to Blas Nuenz Neto
New rules will require most asylum seekers to file applications and make appointments before showing up at the border. If asylum seekers do not follow the rules, they won’t qualify for asylum, with only a few exceptions
The administration will rely on migrant processing centers which will open first in Colombia and Guatemala
Border patrol agents worry news will prompt more migrants to make the journey north
The city of Brownsville, Texas recently declared an emergency after thousands of migrants crossed from Matamoros into Brownsville. Broder patrol officials say local authorities have been scrambling for resources as shelters in the area are over capacity — this is where my company comes into play to provide shelter and provide for this need
City of El Paos is set to declare an emergency as thousands of migrants are living in Ciudad Juarez awaiting the end of Title 42
There are already hundreds of migrants sleeping on sidewalks around Sacred Heart Catholic Church in Downtown and overflowing at the Opportunity Center for the Homeless in the Magoffin area of the South Side.
There have been unconfirmed estimates of up to 35,000 asylum seekers waiting in Juarez, Mexico to cross the US Border.
In Brownsville, shelters are struggling to find space for migrants who authorities said have abruptly begun crossing by the thousands from Mexico, the Associated Press reported.
Since last week, officials said that more than 15,000 people, mostly from Venezuela, had illegally crossed in the Brownsville area, a sharp rise from the 1,700 migrants that the Border Patrol encountered in the first two weeks of April, the Associated Press reported.
When Title 42 is lifted, it claims federal agents “will return to using Title 8 immigration authorities to expeditiously process and remove individuals who arrive at the U.S. border unlawfully.”
The announcement claims Title 8 authority violations “carry steep consequences for unlawful entry, including at least a five-year ban on reentry and potential criminal prosecution for repeated attempts to enter unlawfully,” even though over a million people with deportation orders haven’t been deported because of new policies instituted by DHS Secretary Alejandro Mayorkas.
The U.S. will continue to accept up to 30,000 individuals per month from Venezuela, Nicaragua, Cuba and Haiti, or 120,000 total, through its expanded parole policy.
New York Mayor Eric Adams said the migrant crisis is “more than one city can handle.” Chicago Mayor Lori Lightfoot said her city’s shelters have run out of room to house the arrivals.
They spoke up after reports that Texas Gov. Greg Abbott will restart his busing campaign that sent thousands of migrants from his state to Democratic-run cities over the last year. The reported targets for the revived busing campaign would be Chicago, Denver, Los Angeles, New York and Washington.
The mayor of Laredo, Texas has declared a state of emergency due to increasing numbers of migrants being processed in his border city, as well as those expected when Title 42 lifts.
He said that currently, CBP facilities in Laredo have 1,500 migrants; The total capacity is 2,000. So he says he is worried that they will run out of room and migrants will be released onto the streets of Laredo.
United States ends travel ban for unvaccinated international travelers on May 11. What a coincidence title 42 also ends May 11th, we wouldn't want the million illegal Invaders thinking they needed to get vaccinated in order to enter the US.
This will accompany 2,500 National Guard members already in place to support the work of border agents
The troops will arrive as early as 10 May
The number of migrants who crossed illegally into the US there during the 2021 fiscal year was the highest on record since at least 1960. Last year, that number topped 2.76 million - another record
The Biden administration has unveiled a plan that would make it harder for migrants to claim asylum by requiring adult asylum seekers to use an app to book a meeting with US officials or first claim asylum in another country before reaching the US. The app, known as CBP One, was rolled out in January and will remain in place regardless of Title 42.
From these bullet points it appears as if the removal of Title 42 will still occur on May 11th. The Biden Administration would not send 1,500 troops to the border if they do not plan on removing Title 42.
The CBP One app could be a hinderance on the amount of migrants successfully crossing the border, but we should still see a significant amount of foot traffic at the border.
Overall, if Title 42 is removed from policy, it should act as a catalyst for any company generating revenue from the processing of migrants into the United States.
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what company is it?