Home >opinion >online-views >To stop school shooters, boycott shares of gun companies

The AR-15 gun used in last week’s gruesome shooting at Marjory Stoneman Douglas High School in Florida, which left 17 people dead and another 14 wounded, is the same weapon that was used six years ago during the 2012 shooting at Sandy Hook Elementary School in Connecticut that claimed 27 innocent lives.

The condemnation for the vile act was universal. As usual, an outcry went out to ban guns or at least make them more difficult to buy. After all, Nikolas Cruz, the Florida school shooter appears to have walked into stores and bought 10 rifles, almost as easily as most people would buy aspirin from a chemist.

That same day, the stock price for American Outdoor Brands, the company that makes the AR-15 rifle, went up. Clearly customers, fearing a possible ban on guns, rushed to buy more of the company’s products and investors cheered the spike in sales this would bring.

To reword that horrible statement, guns don’t kill, gun makers do. And each time an incident of this kind has taken place, stock prices of the eight publicly traded US manufacturers of small firearms and accessories as well as related companies that make different types of weapons that consumers can buy in a store, have risen. Gun-making is a great business and gun-makers like Smith & Wesson Holding Corp. are valued at over a billion dollars in the market.

It is the reason why governments are soft on gun lobbies. Gun lobbies supported by these companies are huge donors to political parties. Which is why, Americans expect little action from their government despite the tragic loss of young lives.

But what if instead of the futile attempts to ban guns, there was a boycott of gun makers on the bourses?

Following that logic, what if every time companies misbehave or make products or services that are a menace to society, their investors vote with their money?

Don’t approve of the shenanigans at Punjab National Bank? Stop clucking your disapproval and sell its shares.

Don’t like what cigarettes do to people’s lungs? You have an option both as a shareholder as well as a consumer of their products.

Indeed, a random look at companies that make products that have been certified to be bad for people’s health, shows that they are often prized stocks.

That’s because their products, for all their vileness, have a loyal customer base and an investor community that sees nothing wrong in making money off people’s misery.

There is a nascent ethical investing movement which seeks to shun sin stocks in industries like gambling, alcohol and firearms and there are special funds that are focused on environmental, social and governance issues, but these are too small yet to be influential. What’s more, the issue is clouded by a blurriness in defining the boundaries of such investing. The environment, religious beliefs and gender concerns, are among the many issues that are clouding the contours of such investing.

Yet, eventually, it may the best solution to the problem of curbing and eliminating products that are a definite threat to society. Many companies that are currently in these businesses actually enjoy a vice premium. If the manufacturing of guns can be made prohibitively expensive such that only militaries and governments can afford to do so, it may be the most effective dampener for the next crazy high school shooter.

Sundeep Khanna is a consulting editor at Mint and oversees the newsroom’s corporate coverage. The Corporate Outsider will look at current issues and trends in the corporate sector every week.

Subscribe to newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaperLivemint.com is now on Telegram. Join Livemint channel in your Telegram and stay updated

My Reads Logout