Sunday, January 24, 2016

Newest gun control initiative--stock divestiture

After years of trying and failing to push new laws through Congress, gun control advocates are targeting American firearms makers from a different angle, according to NPR..
"The only thing they really understand is money," says Leah Gunn Barrett, executive director of the nonprofit New Yorkers Against Gun Violence. She's also part of a coalition called the Campaign to Unload, which encourages investors large and small to divest from owning stock in companies that make guns and ammunition.
"You may not even know that your 401(k) has gun stocks in it," Barrett says. "So asking the question is very, very important. Not only for individuals, but for public pension's really raising the issue and making gun stocks toxic."
Gun control advocates have been pushing for years to get investors to divest from companies that make firearms and ammunition. Now officials in New York City want to widen that push to include retailers. But not everyone thinks their divestment campaign will succeed.
"If it's made to be punitive, it's not going to work," says Andrea James, a firearms industry analyst with Dougherty & Company. She says gun stocks have performed well because gun sales have been brisk.
"When the divestment happens," James says, "I don't think it really affects the underlying business, meaning the number of firearms they sell."
The divestment camp has claimed some victories after mass shootings in Connecticut and California. Big institutional investors like the California State Teachers' Retirement System (CalSTRS) and pension funds in New York and Philadelphia have dropped their holdings in gun companies.
But the stock price of those gun companies has not gone down. In fact, since the Sandy Hook shootings in 2012, the stock prices of Sturm, Ruger & Co. and Smith & Wesson have mostly gone up, even as big institutional investors have moved to sell.
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