Corrections Corporation of America Goes Public on NASDAQ at $9 Per Share, Wall Street Bets on Mass Incarceration

Corrections Corporation of America (CCA) launches its initial public offering on NASDAQ under the symbol CCAX, selling 2 million shares at $9 per share and raising $18 million to fund expansion. Despite struggling for profitability in its first three years, the company convinces Wall Street investors that privatized incarceration represents a growth industry. By August 1986, CCA manages eight detention centers in Tennessee, Texas, New Mexico, and Florida with average capacity of about 275 inmates.

The IPO represents a watershed moment: incarceration becomes a publicly traded commodity where shareholder value depends on maintaining high prisoner populations. This creates fundamental conflicts of interest where a corporation’s fiduciary duty to maximize profits directly opposes criminal justice reform, rehabilitation, or reduced sentencing. The stock initially declines from $9 to $3 by 1987, but CCA’s persistence in pursuing the privatized prison model eventually pays off spectacularly as tough-on-crime policies drive mass incarceration through the 1990s.

Early investors include Vanderbilt University Law School, where founder Thomas Beasley earned his law degree—an institutional investment that demonstrates how elite educational institutions financially benefit from mass incarceration. The IPO establishes the framework where major financial institutions (Wells Fargo, Bank of America, Fidelity) eventually invest hundreds of millions in private prison stocks, creating powerful lobbying forces against criminal justice reform.