Business, Economics and Jobs

Gun sales skyrocket amid gun stock plunge


An assault rifle is purchased on Dec. 17, 2012 in Tinsley Park, IL.


Scott Olson

As lawmakers across the US debate the possibility of new gun control laws in the wake of the Sandy Hook shooting, weapon sales in parts of the country appear to be on the rise.

Friday's massacre at a Connecticut elementary school that left 26 people dead – including 20 children within the ages of six and seven – has sparked a national conversation about imposing stricter legislation on the nearly $32 billion firearms industry.

The ensuing debate has had a few noticeable side effects. Anecdotal evidence suggests that gun enthusiasts are moving quickly to purchase new weapons – even as the prospect of tougher laws has sent the shares of several gun manufacturers plunging.

A spike in gun sales across the country started with President Barack Obama's reelection. Observers note that may be associated with the traditionally contentious relationship the Democratic Party has with the gun rights lobby. Some Second Amendment advocates fear the Connecticut tragedy will provide more impetus to efforts to restrict gun ownership.

Yet in places like Colorado, Ohio and Oregon, local reports have noted a surge in gun purchases occurring immediately after the Sandy Hook tragedy.

A representative for Colorado's Bureau of Investigation's (CBI) InstaCheck Unit told CNBC that firearms background check requests was in the throes of "record setting volume." The day following the Sandy Hook shooting the CBI received a one-day total of 4,154 requests – a new historical peak.

Although numbers for Monday weren't readily available, Susan Medina, a CBI spokesperson, said that the day's numbers of submitted background checks "continued to be elevated," creating a sizable backlog that the organization is struggling to keep pace with.

The CBI "is working extremely hard to clear the previous day's queue to then launching to the current day's checks," Medina told CNBC in an emailed statement.

The National Instant Criminal Background Check System run by the Federal Bureau of Investigation – which oversees the impromptu investigations required for gun buyers – also saw similar volume to InstaCheck, the CBI stated. According to NCIS data, more than 16 million firearms related background checks have been run this year as of Nov. 30.

Meanwhile, gun maker stocks have taken it on the chin since the news on Sandy Hook broke.

Smith & Wesson's stock tumbled eight percent over the Friday to Monday period, and on Tuesday the stock careened an additional 10 percent lower. Sturm Ruger & Company's shares also plunged by nearly eight percent in midday trading.

Both companies were hurt in part by news that private equity giant Cerberus Capital Management would immediately shed its stake in gun maker Freedom Group, citing the Connecticut tragedy.

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