Gun Stocks Fall After Dicks’ Announcement to Stop Selling Assault Rifles

Published on: 28 Feb, 2018

Dick’s Sporting Goods Inc. (NYSE: DKS), one of the largest U.S. sporting goods retailers, announced that it will stop selling assault style rifles in its stores. The announcement caused gun and ammunition manufacturers stocks to plummet on Wednesday.

Following yet another deadly mass U.S. shooting at Marjory Stoneman Douglas High School in Parkland, Florida, it has raised the voices of activists fighting for more gun regulations and laws. But instead of allowing Parkland to end up as just another statistic, Dick’s wanted to act.

“We at DICK’S Sporting Goods are deeply disturbed and saddened by the tragic events in Parkland. Our thoughts and prayers are with all of the victims and their loved ones. But thoughts and prayers are not enough,” wrote Edward Stacks, chairman and CEO of Dick’s.

“We support and respect the Second Amendment, and we recognize and appreciate that the vast majority of gun owners in this country are responsible, law-abiding citizens. But we have to help solve the problem that’s in front of us. Gun violence is an epidemic that’s taking the lives of too many people, including the brightest hope for the future of America – our kids.”

Dick’s previously sold the Parkland shooter, Nikolas Cruz, a shotgun back in November last year, but that gun was not used in the shooting, which promoted the company to act.

Beginning effectively immediately, Dick’s has announced to stop selling assault-style rifles, including sporting rifles. Along with that, Dick’s will not sell firearms to anyone under the age of 21, not sell high capacity magazines, and never sell bump stocks.

Along with those regulations, Dick’s will require a universal background check which includes mental health information and previous law infractions, ensure a complete database of those banned from purchasing firearms and close the private sales and loops waiving background checks.

Previously, Dick’s announced a short term suspension of assault style rifles following the Sandy Hook shooting, but now it has moved to permanently ban rifles.

"To think about the loss and the grief that those kids and those parents had, we said, ‘We need to do something,'" Stack said on ABC’s Good Morning America. "And we’re taking these guns out of all of our stores permanently."

Following the announcement gun and ammunition manufacturers shares began to plummet. Sturm Ruger & Co (NYSE: RGR) shares fell by 3.8 percent, American Outdoor Brands (NASDAQ: AOBC) fell by 2.5 percent, National Presto Industries (NYSE: NPK) fell by 11.2 percent and Vista Outdoors (NYSE: VSTO) fell by 3.9 percent.

Also following Dick’s announcement, many customers posted their negative responses towards the company’s decision on social media. Many comments seemed to be opposed against Dick’s decision to ban rifles, but very few did praise the decision.

Yet, the students who survived the shooting have been spearheading the movement lobbying for tougher gun laws also demanding companies to stop doing business with the National Rifle Association.

The demand prompted companies such as Symantec Corporation (NASDAQ: SYMC), FedEx Corporation (NYSE: FDX), Hertz Global Holdings Inc (NYSE: HRI) and even more to sever ties with the NRA and end their discounts offered to its members.

Although companies have begun to act, it won’t only depend on them. Those asking for stricter gun laws have moved towards politicians.

In a recent town hall meeting event in Florida, survivors of the shooting had asked questioned and debated the NRA and politicians regarding gun control laws. During the night, one of the students had asked Florida representative Senator Marco Rubio whether he would continue to accept NRA donations.

Sen. Rubio responded by saying that he is a firm believer of the Second Amendment and has held his positions on these issues since he took office. After being continually asked whether he would accept donations, Rubio said that “People buy into my agenda,” and dodged the question without giving a firm answer.

Although, Rubio mentioned that he would support raising the age to purchase guns specifically AR-15 style weapons. Along with him, Arizona GOP Sen. Jeff Flake’s also supported a bill to raise the age, but the NRA opposes the idea.

The growing number of mass shootings taking place in the U.S. is concerning. The issue should have been resolved years ago, which could have ultimately prevented many more shootings and saved hundreds of victims. Simply raising the age to purchase guns does not change gun control. Instead, reform is necessary and needed when approaching gun control laws.

“We hope others join us in this effort to let our kids know that their pleas are being taken seriously.” said Stack, “Some will say these steps can’t guarantee tragedies like Parkland will never happen again. They may be correct – but if common sense reform is enacted and even one life is saved, it will have been worth it.”

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Danny Abramov

Email: danny@financialinsiders.com

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