Gun bubble
What happens to overly inflated industries, also happens to gun companies after a sales boom.
Remember, I do this to entertain me, not you.
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November 16th, 2014 at 5:19 pm
It’s what will happen to any gun company that relies to heavily on government contracts. Frankly I’m waiting for HK to do the same. They hate me so I hate them right back.
November 16th, 2014 at 7:47 pm
Hmmmm….Maybe Kel-Tec has the right business model?
November 16th, 2014 at 8:08 pm
I know my Ruger stock took a hell of a hit last month. They’re not even on .gov contracts.
November 16th, 2014 at 8:52 pm
Actually, H&K is offering a $200.00 rebate on civilian sales of some of their products.
http://hk-usa.com/wp-content/uploads/HK-DAYS_4-x-5.5-COUPON-CC.jpg
It’s too bad they aren’t offering “retro” rebates… 🙂
November 16th, 2014 at 10:13 pm
*shrug* What goes up must come down. I suspect that what’s happening is simple — there was high demand after November 2008, the demand kicked up even more after Newtown CT etc…. and the gun manufacturers ramped up production as much as they could. But that’s a recipe for an eventually-saturated market; sooner or later people will have bought all they feel they need for the time being, and the demand will slack off.
If so, soon we will see a glut, probably of ammo as well as guns. I don’t particularly see that as a bad thing.
November 17th, 2014 at 11:51 am
Well, it IS a bad thing when you consider that most retailers, in response to their customers demanding it, started stocking higher inventories. Those inventories are sitting there unsold, collecting dust, and COSTING the retailers the interest payments on the credit used to buy the stock in the first place.
Mom and pop places will be the first to start selling off their stock at a loss, simply to keep the doors open longer to delay the inevitable. If all they do is firearms, they will have a hard time staying in business, and the customers will suffer from having less places to shop.
Online bargain-basement places won’t fare any better, because their business model was based on moving high volume at less than 2% profit. Folks thinking that they will see even lower prices online because of a glut are thinking wishfully, because as sales volume slows, prices will need to increase to keep the business viable. Online sellers will start to go away too, when their revenue stream goes away.
Ammo? If the ammo makers are smart, they will slow their production down NOW, to keep demand and prices inflated artificially for as long a period as they can. The slowdown will hit them too, but if they are watching the gun sales, they will take heed and start laying off / slowing down so as to avoid the hit for as long as possible.
November 17th, 2014 at 12:07 pm
Colt has to come up with $10.8mil Today, if they don’t want to default on their bonds. a little birdie told me they don’t have it.