Want To Make A Million In The Gun Business? Start With Two Million.

If you decided to invest in the stock market on June 15, the Dow that day stood at 21,359. The day after Thanksgiving it closed at 23,557. In other words, just about any stock you would have bought in June was probably up at least 10% over the following five months. Unless you made the mistake of buying Smith & Wesson stock, which was selling for $24 on June 15 and closed on November 24 at $13 a share. You would have done a little better with Sturm, Ruger, which was at $68 a share in mid-June and ended last week at $50, a nosedive of ‘only’ 25 percent.
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Talk about a Black Friday! The old joke used to be that if you wanted to make a million in the gun business, start with two million. That old joke seems to be coming true in spades! But if that’s the case, and I thank our good buddy Shaun Dakin for pointing this out, how come the FBI-NICS background check system set a new, single-day record for the number of received calls? They claim they were ‘flooded’ with 203,086 calls on Friday, which broke the single-day record of calls – 185,713 – set on Black Friday in 2016.
Before all my friends in the gun violence prevention (GVP) community start lamenting that America is once again becoming awash with guns, let’s remember that on average, more than 40% of the calls received by NICS are for license verifications, private sales and other issues which have nothing to do with the over-the-counter movement of guns. And when the FBI publishes their total monthly stats for November, I’ll take the short odds that retail gun sales will continue to show the same 15% slide that has been going on all year.
Want to see a really great investment opportunity in guns? Add some corporate debt bonds issued by Remington Arms, which has dropped from $65 to $14 over the last six weeks. And it appears that this trend will not only continue but may get worse, with Remington broadly hinting that a default on their debt may not be far behind. And the reason why their bonds are turning into junk is the same reason that prices for Ruger and S&W stock continue to fall, namely, that nobody’s buying their guns.
Incidentally, Remington happens to be the ‘flagship’ company for an outfit known as the Freedom Group, which was the brainchild of an amateur gun nut named Steve Feinberg who cobbled Remington together with Bushmaster, DPMS, Marlin and a couple of smaller companies to create what was described as the leading “innovator, designer, manufacturer and marketer of guns and ammunition” anywhere, anytime, anyplace. I’m quoting from the press release for what was supposed to be a big $200 million IPO in 2010. Now they can’t pay off their $275 million debt. Oh well, oh well.
I don’t follow the ins and outs of the stock market but I do know something about the price of guns. Right now I can buy a Smith & Wesson Shield pistol from Bud’s Gun Shop for $299. I can buy the same gun from the Grab-A-Gun website for $279. I’ll have to pay my local dealer a few bucks to do the transfer, but a year ago that gun was selling for $379. I can pick up a Ruger AR-15 for under 600 bucks; that man-killer used to sell for $899 or more.
In my lifetime I remember when every, single American kitchen had a Mixmaster next to the stove. I also remember when I first put my hands on the keyboard of an electric typewriter made by IBM. If the stock prices of S&W and Ruger continue to slide, those company names will wind up like Studebaker, Philco and Trump Air. Remember something called a pay phone?

 

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