In the hours after a mass shooting in America, there’s recently been a noticeable pattern: Gun companies’ stock prices go up. It happened after San Bernardino. It happened after the Pulse nightclub shooting in Orlando. And it happened again on Monday, after the massacre in Las Vegas. The spikes in share prices are now predictable enough that financiers bet on them happening again.

What’s behind this grim trend? Understanding how mass shootings affect the demand for guns requires first recognizing the charged political and emotional space that guns occupy in American culture. There are a few reasons Americans buy more guns after shootings. Some describe wanting to protect themselves from violence; others worry that high-profile massacres will lead to stricter gun regulations, or a ban on the purchase of firearms entirely. Both of those impressions add some urgency to buying a gun, so demand goes up, and, in anticipation of that, so do the share prices of gun makers shortly after a shooting.

The uptick on Monday actually wasn’t a huge move, and it was in the opposite direction of what gun manufacturers’ stocks have been doing in the past year. Since Donald Trump took office, sales have been down. One explanation is the inverse of why stocks perk up after a shooting: When government is controlled by a party that is unlikely to pass any gun-control legislation, that limited-time-only feeling becomes much less potent. Conversely, a frequent line among those who follow the industry is that Barack Obama, who regularly signaled his interest in gun control, was the best gun salesman on earth.

Indeed, the industry soared during Obama’s tenure. The Bureau of Alcohol, Tobacco, Firearms, and Explosives estimated that in the early 2000s, about 6 millions guns, on net, were being added to the nation’s private stockpile each year. By 2013, that annual figure was up to 16 million. (One of the best recent estimates for the total number of guns in private hands in the U.S. is 265 million, though the number is notoriously difficult to track.)

And though there may be a record-high number of guns in the United States today, the same forces at play now have been influencing demand for decades. "Before the Gun Control Act of 1968, there was a big ramp-up [in sales], because Congress was on the way to passing it," says Phil Cook,  an emeritus professor of public policy at Duke University. But the odd thing about this dynamic more recently is that it’s been prompted by a fear of legislation that will likely never materialize. “It seems like eventually the gun-loving public would learn that the federal government is not going to do anything to tighten regulations,” says Cook.

There have been other trends shaping the growth over the past decade too. For one, even as the percentage of American households that own guns has gone down, the number of guns sold has gone up; it’s among these repeat buyers that the industry expects the most growth in the future. Just 3 percent of American adults own roughly 130 million guns, according to a sweeping 2016 survey by researchers at Harvard University and Northeastern University. Nearly 8 million Americans are so-called “super-owners,” and own anywhere from eight to 140 firearms per person, the survey found.

Some analysts believe that the drop-off in gun sales over the past year is temporary. Just last week, the investing-research firm Wedbush Securities published a research note that upgraded the stock of American Outdoor Brands, one of the firms whose share prices edged up on Monday, from “Neutral” to “Outperform.” The note reported that even though the industry is in some ways “beleaguered,” it is “showing no signs of going away.”

“A lingering question on the minds of investors,” the report went on, “is how many guns does one person need or ultimately how much room does the industry have to grow?” A survey Wedbush made of more than 200 gun owners suggested that the answer to both questions is still more.


Wedbush Securities

The story of American gun sales, then, is a story on three time horizons. The small boost in share prices in the early hours of trading on Monday show how gun makers benefit from shootings in the short run. The slowdown in sales over the past year shows how they suffer in the absence of a politician who threatens to regulate firearms. And the enormous increase in sales over the past decade shows that Americans will keep buying guns, especially after horrific shootings.