The November 2020 elections failed to culminate in the nightmare, worst-case scenario many onlookers feared, which is generally good news if you don’t happen to be a firearms manufacturer.
Gun stocks plunged on Monday after so-called stay-at-home stocks in general took a hit from news that Pfizer’s vaccine for the novel coronavirus looks promising, and that mass violence, or much violence at all, “failed to materialize” following Democrat Joe Biden’s victory, Reuters reported. Gun sales generally fluctuate in anticipation of and following major shifts in political power, crises, and national disasters ranging from Trump’s election in 2016 to mass shootings, mirroring how jittery gun owners are and whether they feel the need to amass larger arsenals. It’s been no different since Biden sealed the deal, Reuters wrote:
Smith & Wesson Brands [SWBI.O] and rival Sturm Ruger & Co [RGR.N] fell more than 9%, while Vista Outdoor [VSTO.N], which sells ammunition and a range of sporting goods, fell over 12%.
... Smith & Wesson’s shares have jumped or dropped at least 6% in every session since the election, and they are now down 11% overall since Tuesday.
This is a blip on the radar for gun manufacturers, who were up big time over the past year thanks to the pandemic, unrest related to nationwide protests against police racism and brutality, and the election, which was widely anticipated to result in some kind of breakdown of societal order. Smith & Wesson Brands is up over 152% in the last year, while Sturm Ruger & Co. is up over 41%. Vista Outdoor is up more than 105% in the same period.
Pew Research Center polling from October 2019 found that about 30% of Americans said they own a gun and an additional 10% live in a household with one, with 67% of owners saying a major reason is protection. While many retailers saw sales slumps courtesy of the pandemic and its attendant lockdown orders and drops in foot traffic and consumer spending, that wasn’t true of gun stores. Gun sales in the U.S. set another record in 2020, with National Shooting Sports Foundation data showing 17.2 million background checks completed this year, up from the previous high of 15.7 million in 2016.
The Gun Violence Archive has tracked more than 36,900 deaths from guns across the U.S. so far this year, including nearly 16,200 homicides or unintentional deaths and more than 20,700 suicides. Over 33,600 people were injured by a firearm. Those numbers put the U.S. on track for a historic year in gun violence, with mass shootings soaring and some research showing increased violence is tied to the novel coronavirus pandemic.
The immediate outlook for the gun industry may be slowed sales, but that could easily change if Americans fear Biden’s administration will clamp down on firearms sales (or, perhaps, if the Trump administration’s efforts to remain in power take a darker turn in the coming months).
“If a vaccine that is 90% effective can truly bring COVID to an end, the return to work and school could subsequently bring sales in these categories back down to normalized levels,” Rommel Dionisio, an Aegis Capital analyst, told Reuters.
Dionisio added that if gun owners think the inbound administration or various states could move toward stricter gun control policies, firearms stocks could still see another bump.