The hedge fund managers profiting off Sandy Hook
Two hedge funds purchased millions of shares in gun stocks after the Newtown massacre, banking on hysteria
Topics: Sandy Hook, Newtown, Newtown shooting, Bushmaster, Assault weapons, Guns, Gun Control, Hedge funds, Business News, News
After Adam Lanza shot dead 20 children in a Connecticut primary school with his mother’s Bushmaster XM15-E2S rifle, public discourse turned swiftly to the well-hashed gun control debate. Legislation was proposed, teacher gun-training groups launched, Bushmasters flew off shelves in fear of an impending ban. Meanwhile, the markets were moving.
Arms manufacturers Smith & Wesson, Cabela’s and Big 5 all boasted sterling third quarter results in the post-Sandy Hook gun boom. A number of big retail chains moved to end sales of AR-15s and similar assault weapons in the wake of the shooting and Cerberus Capital, the New York firm that owned Bushmaster, sold the company, calling the Connecticut shooting a “watershed event.” But a small number of hedge funds, accustomed to a sadly familiar pattern (gun massacre, leads to fear of gun bans, leads to mass gun sales), moved to make bank on the tragedy and this predictable trajectory.
In an unremarkable February report, Bloomberg News noted that Owl Creek Asset Management LP bought 1.62 million Smith & Wesson shares around the time of the Sandy Hook shooting. Although the precise date of the acquisition is not known, the implication is that the investment was made days after the massacre. On Monday, activist publicity organization Sparrow Media pushed the story a stage further, highlighting the hedge fund managers behind the purchases.
“Jeffrey Altman, Founder and Portfolio Manager for Owl Creek Asset Management, and Robert Bishop, of Impala Asset Management, each seized an opportunity in the days following the Sandy Hook Shooting, to purchase millions of shares in gun stocks (1,616,300 shares [valued at $13,642,000] and 893,938 shares [valued at $27,787,000], respectively),” wrote Sparrow Media, adding, “Altman’s and Bishop’s intentions, as deduced by peers in asset management, are to turn the fears and murmurations of new gun regulations into profits, as a newly fabricated demand for firearms like the Bushmaster .223 Caliber Assault Rifle, the AR-15 and the Ruger Mini-14—each potentially at risk of regulations—outpaces their supply on shelves at retailers.”
Natasha Lennard is an assistant news editor at Salon, covering non-electoral politics, general news and rabble-rousing. Follow her on Twitter @natashalennard, email nlennard@salon.com. More Natasha Lennard.






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