{"id":67375,"date":"2015-12-07T13:43:01","date_gmt":"2015-12-07T13:43:01","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=67375"},"modified":"2015-12-07T13:43:01","modified_gmt":"2015-12-07T13:43:01","slug":"gun-industry-executives-say-mass-shootings-are-good-for-business","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2015\/12\/gun-industry-executives-say-mass-shootings-are-good-for-business\/","title":{"rendered":"Gun Industry Executives Say Mass Shootings Are Good for Business"},"content":{"rendered":"

3 Dec 2015 – <\/em>Behind closed doors, speaking with investors and Wall Street analysts, the gun industry views mass shootings as an opportunity to make lots of money.<\/p>\n

\"Guns<\/a>

Guns are on display at Roseburg Gun Shop in Roseburg, Oregon, on October 2, 2015.<\/p><\/div>\n

Ordinary people are despairing about the frequency<\/a> of tragic events like the murderous rampage in San Bernardino on Wednesday, or the Planned Parenthood massacre last week. And the cycle of mass killing, media frenzy, and political stalemate starts anew each time.<\/p>\n

But meanwhile, gun sales continue<\/a> to break records, a fact that has not gone ignored by financial analysts.<\/p>\n

The Intercept<\/em>\u00a0reviewed investor transcripts for gun companies, ammunition manufacturers, and sporting stores, and found many instances of industry executives discussing mass shooting incidents and the resulting political dynamics as lucrative.<\/p>\n

Here\u2019s how it works. Following a mass shooting, there is talk of gun control, which the National Rifle Association and other gun advocates attack as an assault on the Second Amendment. Notably, gun and ammunition manufacturers often donate, either directly or as a portion of each sale, to the NRA. The fear of losing gun rights leads to panic buying, which brings greater profits to gun retailers, gun companies and their investors.<\/p>\n

Gun Distributors<\/strong><\/p>\n

\u201cThe gun business was very much accelerated based on what happened after the election and then the tragedy that happened at Sandy Hook,\u201d Ed Stack, the chief executive of Dick\u2019s Sporting Goods, a leading gun and ammunition retailer, said in September 2014 at the Goldman Sachs Global Retailing Conference. Stack noted that the industry saw \u201cpanic buying\u201d when customers \u201cthought there were going to be some very meaningful changes in our gun\u201d laws. The new sales \u201cdidn\u2019t bring hunters in\u201d but rather \u201cbrought shooters into the industry,\u201d he added.<\/p>\n

In 2012, 20-year-old Adam Lanza fatally shot 20 children and 6 adult staff members at Sandy Hook Elementary School in Newtown, Connecticut.<\/p>\n

Last year, Tommy Millner, the chief executive of Cabela\u2019s, a retailer that sells guns, boasted at an\u00a0investor conference in Nebraska\u00a0that his company made a \u201cconscious decision\u201d to stock additional weapons merchandise before the 2012 election, hoping Obama\u2019s reelection would result in increased sales. After the election, the Newtown mass shooting happened, and \u201cthe business went vertical \u2026 I meant it just went crazy,\u201d Millner said, according to a transcript of the event. Describing the \u201ctailwinds of profitability,\u201d Millner noted Cabela\u2019s \u201cdidn\u2019t blink as others did to stop selling AR-15 platform guns,\u201d and so his company \u201cgot a lot of new customers.\u201d The AR-15 is a high-powered assault rifle based on the military\u2019s M-16 model but without the full automatic capacity,<\/p>\n

Steven Miller, the chief executive of Big 5 Sporting Goods, another gun retailer, was asked by investor analysts in 2013 to describe the state of the market during a conference call that year.\u00a0The \u201creal surge\u201d in firearm sales, Miller said, \u201ctook place following the tragedy in Sandy Hook.\u201d<\/p>\n

Gun and Ammunition Manufacturers<\/strong><\/p>\n

Smith & Wesson chief executive James Debney, speaking to the Roth Capital Partners conference in 2013, explained that \u201cthe tragedy in Newtown and the legislative landscape\u201d resulted in sales that were \u201csignificantly up.\u201d The \u201cfear and uncertainty that there might be increased gun control,\u201d Debney said, \u201cdrove many new people to buy firearms for the first time.<\/p>\n

\u201cYou can see after a tragedy, there\u2019s also a lot of buying,\u201d Jeff Buchanan, the chief financial officer of Smith & Wesson, told investors at the RBC Capital Markets conference in September of this year. Buchanan noted that the political landscape of 2016 is uncertain, but that fear of gun control could be on the horizon.<\/p>\n

Michael Fifer, the chief executive of Sturm Ruger, one of the largest gunmakers in America, discussed\u00a0the role of politics in gun sales during a conference call with investors in 2013. \u201cIf you look back at historical patterns back in late \u201908, early \u201909, you saw a huge spike in accessory sales which then tapered off, and then we saw it again with the really tragic events at Sandy Hook that started again as soon as the politicians started talking about restricting legal gun use,\u201d Fifer said.<\/p>\n

Wall Street Analysts<\/strong><\/p>\n

Market analysts, including consultants who often hold executives accountable to investors, have been keen to ask gun companies about how they are able to respond to surging sales following mass shootings.<\/p>\n

Gautam Khanna, an analyst with Cowen & Co., an investment banking and market research firm, interviewed Mark DeYoung, then the chief executive of ATK, an ammunition manufacturer, at the Cowen Aerospace conference in 2013. Khanna asked DeYoung if he would make pricing decisions based in part by the \u201cNewtown shooting tragedy.\u201d<\/p>\n

DeYoung responded that \u201cobviously we are all shocked\u201d by \u201cwhat happened in Newtown and what happened in Aurora, Colorado, and what happened in Tucson, Arizona, with Gabby Giffords.\u201d But, he added, the company will continue to \u201crespond to market pressures,\u201d including increases in demand. On a separate conference call that year, DeYoung noted\u00a0that\u00a0certain \u201cspikes\u201d in demand have driven sales.<\/p>\n

James Holmes killed 12 people and injured more than 70 others after opening fire in an Aurora, Colorado, movie theater in 2012.<\/p>\n

In 2011, Jim Barrett, a financial analyst, asked Ruger\u2019s Fifer during a call with investors if the \u201crecent shooting incident in Tucson\u201d \u2014 referring to the shooting that year of Rep.\u00a0Gabby Giffords \u2014 \u201chas stirred gun owners and prospective gun owners to go visit the stores?\u201d<\/p>\n

Bob Sales, another analyst, asked Fifer\u00a0how his company was preparing for future gun sales,\u00a0given that \u201ca combination of the election in 2012 and the Sandy Hook incident \u2026 spurred a massive binge of gun buying.\u201d<\/p>\n

On a conference call with investors, Millner, the chief executive of Cabela\u2019s, fielded a question about the Aurora mass shooting from an analyst with Imperial Capital, who asked him if the incident had \u201cany impact on your business.\u201d Millner responded, \u201cI would say that the trends that you read about in the press, we are experiencing at least thus far since the incident.\u201d<\/p>\n

The business rhetoric around mass shootings \u201cdoesn\u2019t surprise me at all,\u201d says\u00a0Ladd Everitt, the director of communications of the Coalition to Stop Gun Violence. Everitt noted that the National Rifle Association, which is funded by gun manufacturers, often uses similar language following mass shootings.<\/p>\n

\u201cThis just shows the guys in the suits understand this and are utterly cynical about it.\u201d<\/p>\n

Go to Original \u2013 theintercept.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

In investor transcripts obtained by The Intercept, gunmakers and retailers describe mass shootings \u2014 and the resulting political dynamics \u2014 as lucrative.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[65],"tags":[],"class_list":["post-67375","post","type-post","status-publish","format-standard","hentry","category-anglo-america"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/67375","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=67375"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/67375\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=67375"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=67375"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=67375"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}