The mass shooting that took place on Dec. 14, 2012 at Sandy Hook Elementary School in Newtown, Connecticut, not only had a massive impact on the entire country; it has had a major impact on the gun industry. That day, a gunman armed with his mother's legally-owned weapons went on to kill 26 people, mostly children, at the school.

The violence and magnitude of the tragedy generated immediate outrage and a widespread call for tougher gun control legislation in the United States. The National Rifle Association released a statement, however, calling for armed guards in schools. The short-term aftermath has resulted in an increase in gun sales and permit applications and a drop in share value for gun manufacturers. The long-term impact will, in part, depend on any legislative changes to gun laws.

Gun Purchases

According to Connecticut's Department of Emergency Services, gun sales rose over 180% the day after the massacre over the same day last year. Retailers all over the country report increased sales of both firearms and ammunition. The sales spike is attributed to current and new gun owners' fears of potential new legislation banning or regulating assault or semi-automatic weapons.

Not all thriving retailers are basking in the revenue boost. Dick's Sporting Goods (NYSE:DKS) announced in the days after the shooting that it would suspend the sales of sporting rifles in all of its 500 nationwide locations and would remove all guns from its store closest to Newtown. The chain has not announced how long the suspension will last or whether it will make any permanent changes to its gun offerings.

Wal-Mart Stores (NYSE:WMT) reportedly has removed a semi-automatic weapon similar to the one used by the gunman from sale at all of its stores, but has not made a formal announcement of the change.

If tighter gun control is enacted, the sales of most classes of guns will likely drop as owning a weapon becomes a more difficult and longer process.


The most immediate financial impact of the Sandy Hook shootings was the drop in stock prices of the gun industry's two largest players: Smith & Wesson (Nasdaq:SWHC) and Sturm Ruger & Co. (NYSE:RGR). Smith & Wesson closed 18% down on the Tuesday following the shootings versus its close the day before the event. Ruger dropped 16%. Further gun legislation could affect stock values in the longer term.

Several large institutional investors, including teachers' pension funds, have announced that they will be reviewing all of their investments and divesting in any company related to the gun industry. Any increase in sales in the wake of the tragedy is likely to be overridden by the lack of demand for gun manufacturers' stock.


In 1993, President Bill Clinton signed the Brady Bill into law, named after Ronald Reagan's press secretary, James Brady, who suffered brain injuries after a failed assassination attempt on the president's life. The bill required background checks for all gun purchasers as well as a five-day waiting period. The following year, Clinton enacted the 1994 Crime Bill, which banned a number of semi-automatic and assault weapons. The assault weapons ban was overturned in 1996 by the House of Representatives, and there have been no serious attempts at gun control legislation since then.

Following the Sandy Hook shootings, President Obama promised to make gun control a primary focus of his second term in office. He established a task force led by Vice President Joe Biden to come up with recommendations to address gun violence. The task force has one month to produce these recommendations, and Obama has stated that he wants to enact changes by the end of 2013.


With the majority of public sentiment in the weeks following the shooting overwhelmingly negative towards the gun industry, companies and organizations carrying gun ads are rethinking their practices. Electronic Arts (Nasdaq:EA), the second-largest video game developer in the country, announced at the end of December that it would be taking down all links to gun manufacturer websites from its Medal of Honor Warfighter webpage. The links originally allowed players to shop for the real versions of guns found in the game. Other gun marketing partners are likely to reassess their relationships with the industry and follow EA's lead.

The Bottom Line

Whether the short-term financial and investment impacts of the Sandy Hook shootings has any longer-term effect on the gun industry depends on many issues, including the potential enactment of stricter gun control legislation. What is a certainty is that gun control, and gun manufacturing, will continue to be a hot topic during 2013.

Related Articles
  1. Insurance

    Medicare 101: Do You Need All 4 Parts?

    Medicare is the United States’ health insurance program for those over age 65. Medicare has four parts, but you might not need them all.
  2. Economics

    Understanding Donald Trump's Stance on China

    Find out why China bothers Donald Trump so much, and why the 2016 Republican presidential candidate argues for a return to protectionist trade policies.
  3. Economics

    Will Putin Ever Leave Office?

    Find out when, or if, Russian President Vladimir Putin will ever relinquish control over the Russian government, and whether it matters.
  4. Markets

    Will Paris Attacks Undo the European Union Dream?

    Last Friday's attacks in Paris are transforming the migrant crisis into an EU security threat, which could undermine the European Union dream.
  5. Budgeting

    How Much Will it Cost to Become President In 2016?

    The 2016 race to the White House will largely be determined by who can spend the most money. Here is a look at how much it will cost to win the presidency.
  6. Economics

    Current Probability of Donald Trump as President

    Predict the current odds of a Donald Trump presidency, and understand the factors that have kept him on top and the looming challenges he faces.
  7. FA

    Millennials Are Pushing This Hot Investing Trend

    Socially responsible investing is really important to young investors. Here's why advisors should consider such investments.
  8. Professionals

    The Highest Paying Government Jobs

    Learn how professionals can work for the government and still make high salaries; identify the specific professions that pay the most in government work.
  9. Investing

    Would an Infrastructure Bank Help America's Faltering Roads and Bridges

    Politicians are now calling for a National Infrastructure Bank to create jobs. But would a bank provide adequate funding to fix our roads and bridges?
  10. Economics

    Trudeau Spurs Boon for Marijuana Industry

    Canada's newest leader campaigned on a promise to legalize recreational marijuana and has the political power to do so. This policy change would have incredible effects on the marijuana industry ...
  1. How does gun control policy affect the stock price of firearm companies?

    Gun policy in the United States is set by both the federal government and the state governments. In general, companies that ... Read Full Answer >>
  2. What are some common traits of undervalued stocks?

    Investors usually use three primary techniques for valuing companies. The first is a comparative model where a firm’s stock ... Read Full Answer >>
  3. What are the best indicators for evaluating technology stocks?

    Technology stocks are often some of the most discussed stocks on the news. Products and services offered by technology companies ... Read Full Answer >>
  4. What is the Social Security administration responsible for?

    The main responsibility of the U.S. Social Security Administration, or SSA, is overseeing the country's Social Security program. ... Read Full Answer >>
  5. Where are the Social Security administration headquarters?

    The U.S. Social Security Administration, or SSA, is headquartered in Woodlawn, Maryland, a suburb just outside of Baltimore. ... Read Full Answer >>
  6. Is the Social Security administration a government corporation?

    The U.S. Social Security Administration (SSA) is a government agency, not a government corporation. President Franklin Roosevelt ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  2. Bullish Engulfing Pattern

    A chart pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses ...
  3. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
  4. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  5. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
Trading Center