Annie's already got her gun

As a big gunmaker prepares for a public offering, signs emerge suggesting the frenzy to stock up on ammo is abating


Andrew Leonard
October 23, 2009 5:12PM (UTC)

Freedom Group, a holding company for an assortment of gunmakers  majority owned by the private equity group Cerberus, is planning a public offering. At Footnoted, Michelle Leder spotted the following note in a SEC filing from Freedom Group arguing that the Obama administration is one reason why prospective investors should get in on the action.

Our industry has experienced a significant increase in certain firearms and ammunition demand since late 2008. We believe a number of consumers have been concerned about increased firearms and ammunition regulations as a result of the new administration in connection with the 2008 Presidential election. We view these increases in demand as having significant long-term benefits, including expanding the popularity of shooting sport categories, as well as providing an opportunity to cultivate new, and renew existing, long-term customer relationships across our portfolio of products and brands.

But the opionizers at BreakingViews say Cerberus better hurry, because "this gun bubble may backfire."

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This bubble may already be deflating. Smith & Wesson's backlog hit $268 million early this year and shrank to $177 million last quarter because of cancellations and fewer orders. Considering it stood at only $50 million in April 2008, the backlog could have further to fall. Sturm, Ruger reported roughly similar trends.

If sales fell to more typical levels of recent years, up to two-thirds of gun sales could disappear. And they could fall further as there are up to 300 million functional guns already in circulation. And firearms have a very long lifespan if properly cared for.

BreakingViews suggest another reason why gun sales may stall is that Americans are less fearful of an overwhelming economic catastrophe that would transform the nation into feuding survivalists shooting it out in pitched battles over declining stocks of Pampers at the nearest Wal-Mart superstore. There's also the chance that some people are recognizing that cracking down on the right to bear arms doesn't appear to be in the Top 25 list of priorities the Obama administration is currently working on.

But the more basic point, with respect to gunmaker backlogs starting to decline, is that everybody in this country who wants a gun already appears to be armed to the teeth.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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