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Gun manufacturers' shares perform well after Las Vegas shooting

04 Oct 2017 | Written by Anupama Vijayakumar; Edited by Shikha Chaudhry
How do mass shooting incidents affect the stock-market?

The recent Las Vegas shooting incident has left many Americans feeling shocked and insecure.

However, their insecurity over gun violence seems to be working out well for gun manufacturers as their share prices are steadily rising after the incident.

This is because investors anticipate an increase in gun purchases as gun control laws are expected to be tightened soon.

Here's more about it.

In context: How do mass shooting incidents affect the stock-market?

AttackLas Vegas: Mass shooting at music festival near Mandalay Bay

Stephen Paddock, a 64-year old accountant opened fire at a country music festival in Las Vegas being held at the Mandalay Bay Resort and Casino.

The death toll currently stands at 59; at least 500 have reportedly been injured.

Paddock later shot himself as the police raided his room at the Mandalay Bay hotel packed with firearms.

04 Oct 2017Gun manufacturers' shares perform well after Las Vegas shooting

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How has the Las Vegas shooting impacted share prices?

Shares of gun manufacturers, Sturm Ruger & Co and American Outdoor brands Corp rose 3% each. Ammunition manufacturer Visa Outdoors Inc. recorded a 2% rise in share price. Meanwhile, share prices of MGM Resorts International, which owns the Mandalay Bay Hotel dropped about 3%.
Why are the prices rising?

What?Why are the prices rising?

Gun sales have usually surged after mass incidents in the past such as 9/11, as people fear these incidents may lead to stricter gun control laws.

As a result, gun manufacturers' shares usually perform well after shooting incidents that lead to large casualties.

According to experts, this is because investors anticipate that people will rush to purchase guns before stricter laws are put in.

ConclusionWhat does this mean?

The good performance of gun manufacturers shares is strange given the fact that US citizens' right to bear arms was one of Trump's key presidential campaign pitches.

Moreover, the trend indicates that despite data indicating declining gun ownership, Americans view guns as a legitimate way to defend themselves.

Without strict laws, gun manufacturers will continue to profit from a prevailing sense of insecurity.