Dividends and Colt to stop sale of AR-15s to civilians

Often the public gets way ahead of the politicians and business has to make decisions to continue to operate and move on with fewer distractions. Gun violence has increased and one of the solutions to less gun violence is to ensure civilians to not own assault style weapons. In an article by Pat Eaton-Robb of the Associated Press, the manufacturer of the AR-15, Colt Industries for business reasons to stop the production of riles for the civilian market. The company will still produce the rifles for the police and military, where they belong, because the people are trained and generally their mental health is watched more closely.

The Chief Executive of Colt, Dennis Veilleux note the market for modern sporting rifles has experienced significant excess manufacturing capacity or they have a large inventory of guns not selling.

Adam Winkler, a gun policy expert at the University of California , Los Angles School of Law noted FBI data show more than 2.3 million people applied for background checks to purchase guns in August, up from 1.8 million in July. He also said, given the sales and history of Colt being a completely disorganized, dysfunctional company that goes into bankruptcy and can not keep anything going properly, my assumption is that not manufacturing the rifle is a business decision driven by their own business problems.

He also said, in the past when gun manufacturers are viewed to have given into to gun safety advocates, gun owners will boycott them and really hurt their business.

Linking to dividend paying stocks, similar to many other businesses, there are considerations for doing the right thing. In my mind, there is no need for a civilians to have an AR-15 rifle or similar rifles. If you are hunting, for thousands of years, people did not need that kind of fire power; if you are protecting yourself – if you shoot what kind of damage will you do? However, for a company to discontinue something their tradition base of buyers do not like, consequences at gross sales will happen. What is the best alternative?

There are more questions than answers, till the next time – to raising questions.

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