After the devastating mass shooting which happened on the 2nd of December, as well as President’s Obama calling for a decrease in the availability of firearms, gun shares are on the rise in response to the fear of gun control regulations.
This type of high spike in stock prices, as well as an increased revenue for gun companies, is usually seen when the government shows signs of moving towards stricter gun control regulations. Consumers are desperate to buy in order to circumvent the fear of not being able to do so in the future.
The stock prices for both Smith & Wesson and Sturm Ruger & Co have been on the rise for a while now, with the first company mentioned more than doubling its share price with an 116% increase.
Even if Sturm Ruger & Co didn’t face an increase of the same magnitude, the 69% hike in share prices is not something to be ignored.
Social chatter is the usual perpetrator when it comes to the increase in gun company shares, with similar spikes noticeable throughout history. For example, the shootings in Connecticut at the Sandy Hook Elementary School made the stock prices for Smith & Wesson grow considerably. This is because the gun used in the shooting was an assault rifle made by the same company, a Smith & Wesson M&P of 15 .223-caliber.
This urged people to invest into the purchase of products from the aforementioned gun company because of the fear of them going off the market.
Movements towards the dismissal of both government funding as well as funding from a part of the general public’s 401(k) towards gun companies across the nation. This campaign was known by the name of the Campaign To Unload and it encompassed over 50 organizations. This movement allowed people to check on their 401(k) retirement plan in order to see the portion of it which was targeted towards gun companies and effectively cancel it.
Taking into accord that President Obama’s speech held this past Sunday made several remarks that hinted at a possible movement towards a much stricter regulation of firearms in the near future, gun companies are both excited as well as a bit wary.
Despite the fact that gun shares are on the rise in response to the fear of gun control regulations, this type of increase is short-lived, depending on the severity of the regulations that might be proposed in the near future. If these are stricter than originally anticipated, the stocks will fall considerably, even if this spike is currently present. More official information regarding what President Obama has in mind when it comes to gun control will be most likely released after the end of the COP21 held in Paris.