Florida Teachers' Pension Fund Is Long AR-15 Gunmaker Stock
On Tuesday afternoon, Bloomberg was surprised to learn that as it was going through the 2,416 equity investments of the Florida state pension plan, which amount to over $37 billion in market cap, it found a surprising entry: 41,129 shares in American Outdoor Brands (valued at a meager $528,000, including $306,000 in unrealized profits) according to a Dec. 31 securities filing listing the plan’s holdings. The company, formerly known as Smith & Wesson, is the market of the semiautomatic AR-15 assault rifle that was used in the Valentine's Day shooting on the Marjory Stoneman Douglas High School in Parkland, Florida.
In other words, as Bloomberg puts it, "as Florida teachers grieve over the mass shooting that left 17 students and colleagues dead last week, some of them may be surprised to learn they’ve been helping fund the firearms industry—including the company that made the gun used that bloody Wednesday."
In addition to American Outdoors, the filing showed that the Florida Retirement System Pension Plan also invested in gun company stock issued by Sturm & Ruger, Vista Outdoor and Olin Corp. All of these companies manufacture firearms or ammunition, including assault rifles.
We expect that these holdings will be liquidated promptly in the aftermath of the highly politicized shooting, and that the anticipation of said liquidation is why AOBC tumbled 5% yesterday.
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Students at the school who escaped have been calling for gun control measures on social media and in news interviews all day Tuesday, and were scheduled to attend a gun-safety reform rally Tuesday in Tallahassee, the state capital, hosted by the Florida Coalition to Prevent Gun Violence. The Florida State Board of Administration, or SBA, which manages the teachers’ pension fund, is also based there.
“As fiduciaries, the SBA must act solely in the interest of the participants and beneficiaries,” John Kuczwanski, a spokesman for the agency, said in an emailed statement. “As primarily passive investors, we essentially own the entire market subject to any legal limitations.”
True, but that does not matter: after the 2012 Sandy Hook Elementary School shooting in Connecticut, in which 26 elementary school students and teachers were gunned down, CalSTRS and the California Public Employees’ Retirement System sold off their stakes in both Sturm Ruger and Smith & Wesson.
The same will take place over the coming days as the political scandal over the Parkland shooting peaks, and numerous pension systems seek to put pressure on gunmakers by dumping their stock.
Tangentially, speaking of passive investors owning the "entire market", one wonders when the "central bank" that is the Swiss National Hedge Fund Bank will decide that its ownership of tens of billions in FAANG stocks is starting to have a pronounced market impact.
The good news for the Florida pension fund is that its sale of AOBC shares will hardly have an impact on its P&L, or the market; meanwhile its top holdings - like of most other pension funds - remain the 4 megatechs: AAPL, MSFT, AMZN and FB. And until the tidal wave of anti-monopolist/media resentment is unleashed, they have little to worry about.
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Wow, that's nuts.
There is nothing wrong with this. It is just one of many stocks their pensions are invested in. A well balanced portfolio will help them.
And while what happened in Florida is tragic, had there been anyone armed at the school (a guard for example), they wouldn't have had to wait for the police to stop the shooter.
There is a huge social movement to increase gun control. It's not the time to invest in any gun manufacturer.
They will never take our guns away. If people are too dumb to protect themselves... well I hate to say it but it's Darwin's survival of the fittest. It's nature's way of keeping the dumb from taking over.
You are sick. I blocked you from appearing anywhere on my viewing experience here. I don't want it ruining what I consider a great site. I recommend others do as well.
These were kids. They shoudln't have to protect themselves going to school - this is America. And the last thing we need are more weapons.
You and me both Ayelet. I've hidden him from my view as well.
The politicians won't do a thing. Right or wrong, they are too dependent on NRA money. Every time there is a mass shooting, every one gets all up in arms and says "This is the last time. Enough is enough." But nothing ever changes. People mourn, they move on, and more times that not, many virgins go out and break their cherry buying a new gun to protect themselves.
Guns are always a safe investment. They may dip here or there, but they aren't going anywhere.
Gun companies aren't going anywhere??? Um, didn't #Remington just file for bankruptcy?
The largest holder of $AOBC are #Blackrock and #Vanguard.
Great, now I know which companies to boycott.
I agree. It's time for there to be stricter gun laws. But if the government won't act, we should vote with our wallets. Dump shares of companies that do business with gun makers and boycott their businesses.
I don't any of the teachers knew this and are probably as surprised as Bloomberg was. Right now it's bad business to own shares in any gun company so they should dump them regardless.
I disagree. Now is the time to buy. Every time there is a mass shooting, there is a boon in gun sales - people need to go out and protect themselves. Bullish on $AOBC
About 35 percent of U.S. stock mutual funds include investments in a maker or retailer of #guns and #ammunition. That adds up to more than $17 billion spread across more than 2,000 funds.
$AOBC is in the Russell so the passive managers own it, they don’t manage the retirement.