Earlier this morning we ran a piece showing that gun and ammunition sales have blasted off since the Newtown massacre. The reality is that gun, ammo and magazine sales went into an overdrive, and this is not exactly Christmas present sales. The culprit for this mad rush to buy is the coming ban on assault weapons and “military-style” weapons after Obama’s speech on Sunday evening, and then again after President Obama named Vice President Joe Biden to be in charge of the efforts against assault weapons.
While President Obama has said that the Second Amendment will remain intact, and while the words “gun control” and “bans” are craftily being avoided, it is important to remember that Joe Biden was effectively the author of the assault weapons ban that went into effect in the 1990s. After Obama’s speech on Wednesday, the writing on the wall is very clear as he called for a serious proposal no later than the end of January.
As far as gun sales and ammunition sales being elevated or higher, let’s call it a massive understatement. We showed that Wal-Mart Stores Inc. (NYSE: WMT) was out of certain guns online if you type in a ZIP code. The reality is much more extreme, and there is a bit of personal experience here that will show just how much the sales went up — EVERYWHERE is sold out! If you want to purchase a shotgun or a handgun, these are still available. If you are wanting a rifle that would be classified as an assault rifle, an AR, you missed your chance.
Gun buyers in Houston have bought up the entire inventory of AR guns. It is not just the guns. The ammunition is sold out. The magazines are sold out, and not just the magazines that hold 30 or more rounds. Even finding a 10-round magazine is elusive. And ammunition? The smaller boxes of ammunition in the 223-556 calibers may be found, but not the larger boxes. Try calling Top Gun, Academy, Carter Country and other stores and you will get more or less the same answer: “We are sold out entirely, we have no idea when we are getting new stock in, and we have no idea what the pricing will be.” Even the online sites that deal in guns and ammo are now low on inventory as sales have spiked.
To go even further to show how much the demand spiked, the FBI background check system was overloaded. Customers have had to leave guns at the stores because the electronic system kept crashing on Wednesday.
This is not just a local issue either. One email went out from a licensed retailer that most of the suppliers are now cleaned out entirely in their “military style” weapons, ammo, magazines and accessories. The email also said that they have no idea when new shipments will be available.
At issue here is when bans go into effect. Bans drive purchasing, whether it is right or wrong. It seems that a ban of any sort drives people to decide that they better get the banned product before the ban goes into effect. Whether this is smart or rational is something we’ll leave up to the readers to decide. After all, assault weapons and guns of any sort are very heated topics on both sides of the argument and this often transcends party lines.
Wednesday saw interesting trading in the gun makers and retailers. Smith & Wesson Holding Corp. (NASDAQ: SWHC) rose by 7.2% to $8.35 after having seen shares slammed very hard since last Friday’s Newtown massacre. Sturm, Ruger & Co. Inc. (NYSE: RGR) rose 7.5% to $43.63. Dicks Sporting Goods Inc. (NYSE: DKS) has announced some changes to gun sales policies, but its stock was down by 1% at $45.87 on Wednesday. Cabela’s Inc. (NYSE: CAB) is a large seller of hunting, fishing and camping equipment, which includes guns and ammunition, and its shares rose by 5.7% to $41.00 on Wednesday.
Alliant Techsystems Inc. (NYSE: ATK) is classified as a defense and aerospace company, but it is the largest maker of gun and sporting ammunition in America with brands such as Federal Premium, Alliant Powder, RCBS, CCI, Fusion, Speer Ammo, Speer Bullets, Estate Cartridge and Blazer. Its shares were basically flat on Wednesday, or at least down one cent to $62.70 on Wednesday.
The new efforts might not be called “gun control” and the word “ban” may continue to be avoided. Still, the situation and outcome are both very obvious.
JON C. OGG