Gun stocks decline after Connecticut tragedy

Lawmakers are having new discussions about gun control. Can the US strike a balance between the rights of gun owners and the wishes of people favoring more restrictions?

By Jonathan Berr Dec 17, 2012 7:10PM
Credit: Scott Olson/Getty Images
Caption: A customer shops for a pistol at Freddie Bear Sports sporting goods store. December, 2012Shares of two of the largest gun makers, Smith & Wesson (SWHC) and Sturm Ruger (RGR), continued falling Monday amid new interest in gun control laws following last week's horrifying shooting at a Connecticut elementary school.

President Barack Obama and New York Mayor Mike Bloomberg, among others, are showing support for new gun restrictions. But whether those policies will ever see the light of day is another question. The National Rifle Association remains a formidable political force, as does the lesser-known National Shooting Sports Federation, which happens to be based in Newtown, Conn.

Republicans who control the U.S. House of Representatives aren't keen on the idea of enacting new gun control legislation. But the tragic circumstances of the shootings Friday at Newtown's Sandy Hook Elementary School, in which a 20-year-old gunman opened fire and killed 20 children and six educators, may change the debate about gun violence.

As Wedbush analyst Rommel Dionisio said in an interview with Bloomberg News, this rampage was unique because of "the number of children (involved), and the fact that it was very young children." Shares of Smith & Wesson and Sturm Ruger have soared this year because many gun owners feared that President Obama would crack down on gun ownership in his second term. Those fears may come to pass.

But what gets lost among the discussion about guns about is a sense of economic reality. For one thing, the rates of gun ownership have been on a decline for decades. Data cited by Think Progress shows that in 1977, 54% of adults lived in a household with a gun. By 2010, that figure had shrunk to 32%. Smaller gun makers have been struggling financially for years. Freedom Group, a company backed by Cerberus Capital Management that owns such firearms brands as Remington and Bushmaster, shelved plans for an initial public offering last year. Freedom Group, though, is optimistic about its prospects. 

"We believe the continued economic uncertainty and the outcome of the 2012 presidential election is likely to continue to spur both firearms and ammunition sales," the company said in a recent SEC filing. "We believe the industry is also experiencing trends toward increased recreational and shooting sports and home defense."

The tough challenge for policy makers is figuring out which guns need to be controlled. Take assault weapons. To non-gun owners, the name conjures up images of fully-automatic machine guns spraying a small area with a huge number of bullets like the M-4, the rifle favored by the U.S. military. According to the Shooting Sports Federation, the differences between assault weapons and otherwise legal firearms are cosmetic, such as the type of stock used on the weapon. Critics have long argued that these guns can easily be converted to automatic ones and pack more firepower than a user would need for hunting or target practice.

The U.S. has the dubious distinction of having more guns than people and by far the highest rate of gun ownership in the world. Connecticut Gov. Dan Malloy has said that his state has one of the toughest gun control laws in the country. Though some argue that the tragedy could have been averted if some of the teachers were armed, that seems like wishful thinking.  People need to be leery of easy answers to complicated questions. 

For now, the gun industry is keeping a low profile. The NRA has reportedly taken down its Facebook page and officials I contacted didn't return phone calls and emails seeking comment.

Let's hope that people will point to tragedy at Sandy Hook Elementary School as a watershed moment where the U.S. was able to strike a balance between the rights of law-abiding gun owners with those of most Americans who choose not to exercise their right to bear arms. I hope my wish isn't too far fetched.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.


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83Comments
Dec 17, 2012 8:09PM
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"People need to be leery of easy answers to complicated questions."

Like, "Let's ban guns!" for instance? 
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The shooter tried to buy a rifle 3 days before he went on a killing spree & was DECLINED.
The system worked in that regard by not allowing a mentally disturbed person to purchase a rifle....
Bad parenting allowed a mentally disturbed person access to many weapons.
Place the blame accordingly.
Dec 17, 2012 8:07PM
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Just got done buying some more (hunting guns) don't own a pistol since I have no use for one! This has something to do with this out to lunch kid!!!  A very sad ordeal happened!!!!  We can beat this down to the bone but guns don't kill, people do!!!  Guns go off by themselves and kill someone?  Cars and trucks just start up on their own and run someone over?  You people out there need to have a reality check!!!!  Its not the video games or what they show on TV!!!  I have watched action movies, war movies when I was a kid and it didn't make me want to go out and do the samething that they showed on TV!!!!  and all of a sudden I'm going to take out some people because I thought it would be cool?  I think you know what I'm talking about!!!  Parents and LACK of discipline!!!  You brought this on yourselves!
Dec 17, 2012 8:05PM
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"A free people ought not only be armed and disciplined, but they should have sufficient arms and ammunition to maintain a status of independence from anyone who might attempt to abuse them, this would include their own government".
George Washington.

Dec 17, 2012 8:01PM
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We need to start being a bit more honest if there is to be progress in this debate. The proposals under consideration are NOT "gun control measures,"  they are "public massacre prevention measures." 
No proposal I have heard would preclude gun ownership or "take away" anyone's guns. They only seek to make less accessible the TYPES of munitions that are most commonly associated with these massacres, such as automatic and assault weapons with large magazines. Other measures are intended to close loopholes that allow gun show owners to evade restrictions that the public has already accepted, such as background checks and waiting periods.

We should not need the tragedy of Sandy Hook to motivate progress on this important public safety issue. Because that argument only suggests that if the opposition is not persuaded, we will need MORE massacres of children to persuade them of what is humane, responsible and common sense.
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• A 1997 high school shooting in Pearl, Miss., was halted by the school's vice principal after he retrieved the Colt .45 he kept in his truck.
• A 1998 middle school shooting ended when a man living next door heard gunfire and apprehended the shooter with his shotgun.
• A 2002 terrorist attack at an Israeli school was quickly stopped by an armed teacher and a school guard.
• A 2002 law school shooting in Grundy, Va., came to an abrupt conclusion when students carrying firearms confronted the shooter.
• A 2007 mall shooting in Ogden, Utah, ended when an armed off-duty police officer intervened.
• A 2009 workplace shooting in Houston, Texas, was halted by two coworkers who carried concealed handguns.
• A 2012 church shooting in Aurora, Colo., was stopped by a member of the congregation carrying a gun.
• At the recent mall shooting in Portland, Ore., the gunman took his own life minutes after being confronted by a shopper carrying a concealed weapon.

These are just a few cases the liberals hate and won't report on because it does not fit their gun control agenda.
Dec 17, 2012 7:53PM
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maybe mental health hospital  stock will go up  even without guns these nuts will find a way to massacre. we need to put corperal punishment back in parents and schools hands . timeout for 15min. without killing games dont work when goody two shoes and the fed gov took pattles out of schools the guns were coming in the other door the kids have no respect for anything at all. this is the so what generation  that boy wasnot the only trigger man you people who stopped butt whuppins are just as guilty seems like every time this happens you all say they are mentle if they are then lock them up for the rest of theyre lives  pay attention look around your way does not work  how many mopre are you  going to be resposible for before you wake up
Dec 17, 2012 7:48PM
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9,000 people were killed by guns in this country last year.In Japan only 2.Enough said.
Dec 17, 2012 7:36PM
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So, let me get this right.... The government and other anti-gun groups and people want to take away LAW ABIDING CITIZENS' semi-automatics and large capacity magazines that would help tremenously against multiple home invaders or assailants, thereby leaving only the CRIMINALS with these weapons...... AND THIS SOMEHOW MAKES US A SAFER NATION?!?!?  Only a full-on lib-tard, commie, limp-wristed, latte sippin Democrap could make "sense" outta this.
Dec 17, 2012 7:30PM
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I dont know how the stocks fell,they just releasted the imformation of record number of weapons and number of background checks by the F.B.I. sold this time of year.I DONT BELIEVE IT.But dont worry i wont by stocks,i will just buy more guns.
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