Gun Company Buys
There’s been a lot of chatter on the internets about Cerberus Capital Management buying up firearms manufacturers. Cerberus various investments generate about $60B (with a b) in revenue according to their website. And they own Chrysler. That’s just to give you an idea of how big they are. They’ve recently acquired DPMS, Bushmaster, and Remington. I guess they have a thing for black rifles (who doesn’t? -ed). This, of course, led a lot of the paranoid gunny types to ponder why they were doing this, including speculation that they had nefarious intent. Guns are a good investment. S&W posted record profits repeatedly for years (that recently changed but it’s not a major loss). And my people in the gun biz are telling me that guns are selling like mad now (elections, mass shootings, something in the water, etc.). Also, an unprecedented level of protection against frivolous lawsuits has been afforded to gun makers via the Protection of Lawful Commerce In Arms Act. Guns are good business.
So, who are these guys? Well, take off your tinfoil beanies. One of the managing directors for Cerberus is George K. Kollitides and he is running for Board of Directors for the National Rifle Association. Here’s one bio:
Nominated by the NRA Nominating Committee, Kollitides has spent his adult life supporting the Second Amendment. A Benefactor member, he became an NRA Life member as a young man. He serves on the Boards of Remington and Bushmaster. He is an avid shooter and hunter, and is a Life member of TSRA, CRPA, NYSRPA, ATA, Boone and Crockett (Associate), Houston Safari Club, NMLRA and Quail Unlimited.
Kollitides is a member of Remington Collectors, SAFE, NWTF, and the U.S. Sportsmen’s Alliance. As a Managing Director of Cerberus Capital Management, he oversees the firm’s interests in the firearms industry. He has managed numerous financial transactions and is a noted financial forum speaker. Kollitides has shot since childhood and enjoys hunting with family and friends.
His wife and children are NRA Life members. As a staunch defender of Second Amendment freedoms, he is honored to be nominated for the NRA Board.
And, obviously, Bushmaster and Remington are giving him the nod and have bios on him as well.
February 27th, 2008 at 2:13 pm
So I should check him off on my NRA director’s ballot as good-to-go? Who else? I notice the Nuge isn’t there anymore, and Joaquin Jackson’s out to pasture…
February 27th, 2008 at 8:19 pm
Wow, sounds like he’s REAL strong on “hunters rights”, whatever they are. *eyeroll*
February 28th, 2008 at 1:13 pm
Well, if you don’t consider a massive 75% drop in share price a “major loss.” As a stockholder of SWHC, I do. 🙂 And they haven’t had years of record growth. The growth didn’t take off until Q2 2005; in Q4 2005 share price dropped almost 50%; growth again in 2006, with another Q4 drop of over 30% (investors hate that pattern, because it indicates management is setting expectations that may be unrealistic, and the class-action lawsuit slapped on S&W last December reflects just that); great growth in 2007, then the bottom fell out in Q4. No real recovery yet. Share price is within a buck-fifty of the crash value.
BTW, Ruger is also running at close to its 52-week low after a nose-dive last fall. So I don’t know who your people in the gun business are, but they may be speaking from emotion, not numbers. The market has yet to see any improvement. So it’s a wonderful time for hedge funds like Cerberus to go…hunting. No tin-foil hats, no schemes to bring down the gun industry: it’s just a great time, economically, to buy up some companies.
February 28th, 2008 at 1:38 pm
75% drop in share prices doesn’t quite reflect the economic reality of what their profits did.
And with share prices low, now wonder they’re buying them up.
March 2nd, 2008 at 5:42 pm
The Nuge and Joaquin Jackson aren’t on the ballot because not all of the director slots are up for election.