Recently, "IPOs" have been the hot topic in the business press. Shorthand for Initial Public Offering, an IPO refers to the formal, legal process of a business issuing its stock for sale to investors for the first time. Some businesses remain privately-held, owned, and managed by one particular family or a small group of executives. Many other businesses, however, rush to make their stock public. This large-scale sale of stock will provide them with a hefty infusion of cash, usually allowing the business to expand production or to buy a competitor.

Out of a whole series of recent IPOs, one stood out among the field: CCA Prison Realty Trust. It's a story all about greed and immorality on Wall Street, and investors' willingness to profit from misery.

Described as a "screaming success" among investors, CCA Prison Realty Trust sold 18.5 million shares (1.5 million more than originally planned) at a price of $21 per share (a dollar above initial projections). Having made $388.5 million on their stock issue, CCA turned around and invested the funds in one of the most lucrative markets available: buying and running new prisons.

It's estimated that the U.S. prison population will reach 3.5 million inmates over the next 10 years, more than double the 1995 count of 1.6 million. An estimated 2% of the total U.S. population will be incarcerated by the year 2005. What a business opportunity!

CCA, drooling over such gloomy figures, wrote in its filing with the Security and Exchange Commission: "As a result of the number of crimes committed each year and the corresponding number of arrests, incarceration costs generally grow faster than any other part of a government's budget. In an attempt to address these pressures, government agencies responsible for the operation of correctional and detention facilities are increasingly privatizing such facilities."

The first people to sell prisons to CCA Prison Realty Trust will be CCA's own top executives, who own Corrections Corporation of America, the parent company of CCA Prison Realty Trust. Corrections Corporation of America has five new prisons under construction that CCA Prison Realty Trust hopes to buy in the future. Both CCAs are at the forefront of the crusade to privatize even more state-run facilities by making enormous campaign contributions to politicians who describe themselves as tough on crime. Now they can both scream for more prisons and look in the Wall Street Journal to check the rising value of their prison industry stock. And with free trade and working class jobs shipped overseas or made "globally competitive" with unliveably low wages, there's no end to the potential for big profits.

--Facts taken from an article by Gregg Wirth in the Left Business Observer, #78, July 17, 1997.