By Noel Randewich
(Reuters) – Shares of firearms sellers tumbled on Monday as promising data from a COVID-19 vaccine trial knocked stay-at-home stocks, and as civil unrest failed to materialize after Democrat Joe Biden emerged as the winner of last week’s presidential election.
Smith & Wesson Brands
They were among several so-called stay-at-home stocks dropping after Pfizer
Sales of sporting goods, including hunting gear, have increased this year as consumers spend more time outdoors due to the coronavirus pandemic.
“If a vaccine that is 90% effective can truly bring COVID to an end, the return to work and school could subsequently bring sales in these categories back down to normalized levels,” Aegis Capital analyst Rommel Dionisio said in an email.
Two other big winners this year from consumers spending more time at home – Peloton Interactive
An absence of civil unrest following the election may also be hurting sentiment for gun stocks.
Worries that Joe Biden and his Democratic party would win the presidency and take control of the Senate from Republicans sent firearms sales surging in recent months, as did violent protests in several cities, and fears of new civil unrest related to Tuesday’s presidential election.
But with control of the Senate still undecided, Biden could struggle to fulfill campaign promises, including banning the sale of military style rifles.
However, Dionisio predicted that fears of gun control could still fuel another surge in firearms purchases by consumers worried they will not be able to buy them in the future.
Smith & Wesson’s shares have jumped or dropped at least 6% in every session since the election, and they are now down 11% overall since Tuesday.
(Reporting by Noel Randewich; Editing by Mark Heinrich)
