2 min read

Profiting From Mass Shootings in America

Profiting From Mass Shootings in America
Photo by Frankie Lu / Unsplash

Making money from mass shootings is as predictable as the shootings themselves.

America has a unique and enduring gun problem that is ingrained in its politics, culture and law. Gallup found that a whopping 42 percent of American households overall owned guns in 2021 and there is a clear, well researched link between gun ownership and gun violence in America.

What is also unique and enduring is the fact that, contrary to what we may think would (or should) happen, gun stocks invariably soar after a mass shooting.

Tuesday's mass shooting at an elementary school in Uvalde, Texas was no exception to this enduring rule. At the end of the trading day, the stock prices of Smith & Wesson, American Outdoor Brands and Vista Outdoor all jumped around 7%; Sturm, Ruger & Company more than 4%.

Looking back, gun stocks went up after the mass shooting at a concert in Las Vegas in 2017. In the days after the 2015 Orlando nightclub shooting, shares of Sturm Ruger rose nearly 10%. In the month following the 2015 mass shooting in San Bernardino, California, Sturm's shares rose more than 25%. The Sandy Hook Elementary School shooting in 2012 caused the company's stock to rise nearly 40% over the next three months.

You're probably wondering why people trade gun stocks after hearing about an 18-year old who shoots his grandmother, kills 19 children and two teachers. The simple answer is that people rush to buy guns out of fear that a mass shooting will lead to new regulations, or calls for new regulations, making it harder to buy them. Investors follow suit and anticipate a spike.

Another enduring fact: standing up to the gun lobby, changing federal laws and reducing the number of guns has proven near-impossible over the years. Republicans constantly shun and Democrats are constantly shunned. President Biden has so far failed to change gun laws, despite proposing four packages of executive actions.

So, unless he has any other tricks up his sleeve to tackle the NRA or gather support from the Republicans, profiting from mass shootings will continue to be a trick that is well-known but not yet rendered useless.