Two days ago, while going through the holdings of the Florida teachers pension fund which amount to over $37 billion, Bloomberg 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 addition to American Outdoors, the filing also 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.
Following the Tuesday news, we said that “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% today.”
The case study for this was already present:
“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.”
And, we predicted, “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.”
It didn’t take long to get validation, because according to Bloomberg, the Florida Education Association is urging the state body that manages pension funds for its members to sell its holdings in companies that make a semi-automatic rifle used in the recent massacre at a high school in Parkland, Florida.
“Surely there are better places for the state to invest its public employee retirement money than in companies that make products that harm our children,” said Joanne McCall, president of the association.
And now that one teachers retirement fund has officially demanded the liquidation of AOBC shares, we fully anticipated they all will, especially since the rest of the portfolio has generated such outsized gains in recent years.
Meanwhile, the impact on American Outdoors stock was immediate, and after spiking at the open by 9%, AOBC is almost back to unchanged.