Speculation of new gun laws being introduced after the tragic mass shooting that took place at a Texan elementary school have triggered a rise in shares of firearms and ammunition companies. Investors predict increased sales due to calls for stricter gun control laws proposed by Democrats.
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By market value, the U.S.’s largest publicly traded gun manufacturer: Sturm, Ruger & Company, saw its stock price increase by 4% at yesterday’s market close. The Second largest Smith & Wesson Brands also saw its shares jump by 7%; the same happened for Vista Outdoor, the parent company of Remington Ammunition: which also increased by 7%. Even though many companies were making gains throughout the day, other major indexes were trading flat while investors were awaiting news from the Federal Reserve on its interest rate policies.
Gun manufacturing companies’ shares normally increase when Democrats call for more restrictions on gun ownership after mass shootings take place; the main reason for the uptick is that: people buy guns just in case new restrictive measures are enforced which would make purchasing weapons harder and costlier than before. Back in 2012, the same scenario occurred after the shooting that took place at Sandy Hook school in the State of Connecticut.
We can already see an example of this trend with search trends for “buy a gun,” which increased immediately after the mass shooting at the elementary school in Uvalde, Texas.
After the mass shooting, Democrats and President Joe Biden have promised to increase further gun control restrictions; however, the Leader of the Senate Charles Schumer (D-N.Y.) has said that further gun control restrictions would be difficult to pass because there isn’t enough Republican support. It is still possible for the President to increase restrictions on guns through executive fiat, and many fear that the president will go down this route as it is probably the only alternative.
Another interesting fact to digest is that mass shootings are not just the only reason for increases in gun sales. Since the start of the Coronavirus Pandemic, roughly more than two million rifles and handguns have been sold; furthermore, according to a survey by the University of Chicago, almost one in five households have purchased a firearm since March 2020.
The survey also shows that in the U.S. one in twenty adults purchased a firearm for the first time ever over the past two years; meaning that 50% of adults living in a household now own a firearm.