Sales had risen amid concerns that guns would be harder to obtain if tougher controls were enacted, but Trump’s victory looks likely to weaken demand

This article is more than 3 years old

This article is more than 3 years old

Shares of the US’s two largest gun companies fell more than 10% on Wednesday morning as investors bet that the huge surge in gun sales driven by fears of reform had ended.

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Donald Trump’s election effectively puts an end to the gun control legislation proposed by Democrats. Under Barack Obama, gun companies have enjoyed record breaking sales and share price growth driven by fears that he would tighten rules on sales following a series of mass shootings.

Smith & Wesson’s shares were down 10.21% and shares of Sturm Ruger were down 12.29% in early morning trading.

Gun sales have reliably spiked in the US after every mass shooting. Last year’s post-Thanksgiving Black Friday sales saw gun sales spike so sharply that the FBI clocked computerized background checks necessary for gun purchases at an average of two per second.

Hillary Clinton had called for background checks the previous month after that year’s 44th shooting at a school, at Umpqua community college in Oregon. The attack left 10 dead and seven wounded.

Gun stocks reliably grow after mass shootings Gun stocks reliably grow after mass shootings

Larry Keane, the senior vice-president for government and public affairs at the National Shooting Sports Foundation (NSSF), a gun manufacturers’ lobby group, denied that there might be market challenges for gun companies under Trump.

“We look forward to working with the Trump administration and the next Congress to protect, strengthen and expand the ability of law-abiding Americans to exercise their rights to keep and bear arms as protected by the second amendment and to improve and enhance the ability of our industry members to grow their businesses and create more good-paying American jobs,” he said.

dominic rushe (@dominicru) Trump's #ElectionHangover is bad news for gun manufacturers. No Hillary to scare customers into buying new ones now... pic.twitter.com/yv03vYpc6t

“Our industry has been steadily growing under both Republican and Democratic administrations. We look forward to continued sustained growth in a more stable political environment.”

Gun stocks doubled in 2015, outperforming much of the stock market. Last year Brian Ruttenbur, a firearms sector analyst with BB&T, said gun companies had much to be grateful for during the Obama administration. “If I was a gun manufacturer I would just say: ‘Thank you, President Obama,’” he said.

Additional reporting by Lois Beckett