After Uvalde, Gun and Ammo Stocks Rise

Since the shooting incident in Uvalde, Texas, the shares of firearm and ordnance manufacturers soared as investors anticipate extra business. 

New gun restriction measures were discussed moments after an 18-year-old gunman opened fire in an elementary school, killing 21 people, including 19 children.

As is typical, following tragedies such as Tuesday’s shooting, gun sales have increased. 

Rise in Shares

Smith & Wesson, one of the largest firearms manufacturers in the United States, saw its stock increase by more than 13.5% since Tuesday, just before the attack in Uvalde.

This is significantly greater than the roughly 3.6% increase in the S&P 500 over the same time period. 

Sturm, Ruger & Company, the biggest public firearms manufacturer in the United States by market capitalization, has seen its stock increase by 7.5%. 

Dreading new gun control laws, it is typical for customers to rush to firearm suppliers and gun stores after mass shootings to purchase new arms and ammo. As a result of this frenzy, investors have devoured affiliated stocks. 

The shares of ammunition makers have also increased in value since the incident. 

Since Tuesday morning, the value of Olin Corporation, Vista Outdoor, and Ammo Inc. increased by approximately 4.3%, 7.4%, and 16.3%, respectively. 

As a result of a mass shooting, it is expected that regulatory steps will be taken to restrict munitions and access to firearms potentially.

The incident at Uvalde was the third-worst shooting incident in U.S. history, following the Virginia Tech attack in 2007 and the Sandy Hook Elementary School shooting less than a decade earlier.

As a result of the shooter’s use of an AR-15-style semiautomatic rifle, the killing at Sandy Hook sparked a new discussion regarding gun control. 

Background Checks

The FBI retains the National Instant Criminal Vetting Process, which tracks and tallies the number of individuals who request background checks to purchase firearms each month.

Rising monthly security checks can be interpreted as a proxy for rising gun ownership stakes. 

Following the mid-December shooting in Sandy Hook, Connecticut, the number of background checks skyrocketed from approximately two million in November 2012 to almost 2.8 million in the month of the incident.

Background checks remained high in January 2013, at approximately 2.5 million. 

While the FBI has not yet released the metrics for this month’s background checks, the number of individuals attempting to purchase a firearm will likely increase slightly. 

After this week’s shooting in Uvalde, Democrats called for new laws that could help prevent mass shootings like the one that occurred. President Biden urged Congress to attempt to pass bipartisan legislation on the issue. 

However, given that the House and Senate are evenly divided, and it is an election year, it will likely be difficult for Democrats to get a bill to the president’s desk for signature. 

Senate Majority Leader Chuck Schumer announced on Thursday the Senate would vote on “gun safety legislation” following the return of senators from the Memorial Day recess, regardless of the outcome of bipartisan negotiations. 

Schumer stated, “We have no illusions that this will be simple.”