Smith & Wesson, American Outdoor Brands to split

[DaveTN]

 

Quote

 

https://www.foxbusiness.com/markets/smith-wesson-american-outdoor-brands-split

Smith & Wesson, American Outdoor Brands to split amid 'significant changes' in political climate

The company's chairman cited the political climate as part of the motivation behind the move.

By Brittany De LeaFOXBusiness

American Outdoor Brands Corporation’s board of directors announced on Wednesday that it will separate its firearm business – Smith & Wesson – from its outdoor products and accessories business.

The split, expected to be completed in the second half of 2020, will be carried out as a tax-free stock dividend to stockholders. The two remaining standalone companies – Smith & Wesson Brands and American Outdoor Brands – would also be independent publicly traded companies.

The company’s chairman cited changes in the political climate as part of the motivation for the move.

"There have been significant changes in the political climate as well as the economic, investing, and insurance markets since we embarked upon what we believe have been our very successful diversification efforts," Barry M. Monheit said in a statement. "We believe that separating into two independent public companies will allow each company to better align its strategic objectives with its capital allocation priorities."

SMITH & WESSON: REPUTATION AMONG GUN SUPPORTERS IS MAIN CONCERN

Ironically the company, which has been making guns since 1852, changed its name from the iconic Smith & Wesson to American Outdoor Brands in 2016. Then CEO James Debney said at the time, "We believe the name 'American Outdoor Brands Corporation' will better reflect our family of brands, our broad range of product offerings, and our plan to continue building upon our portfolio of strong American brands."

But changing times have seemingly pushed for more than a name change.

A number of retailers – like Dick's Sporting Goods and Walmart – have updated their firearm sales policies in the wake of a number of deadly mass shootings – which have spurred increasing calls for gun control across the nation.

Nearly 150 CEOs recently sent a letter to the Senate urging lawmakers to pass gun control legislation.

American Outdoor Brands has also faced pressure to assess how its guns are associated with violence.

"The one overriding factor mitigating the effectiveness of gun control groups to damage the reputations of those in the firearms business is the passion and strength of firearms owners in defending their rights at the ballot box, in the course of legislative debates, and in the marketplace," American Outdoor Brands wrote in a statement in February.

 

 

[Grunt67]

Well, I understand the thinking, but this just sucks! Political correctness has gone off the rails.

[Grayfox54]

Another bunch of corporate cowards. Too afraid of public opinion to just run the company. 

I'm not sure how this will affect S&W? Are they better off or will the loss of big corporation capital spell their end? Only time will tell. 

[DaveTN]

2 hours ago, Grayfox54 said:

Another bunch of corporate cowards. Too afraid of public opinion to just run the company. 

I'm not sure how this will affect S&W? Are they better off or will the loss of big corporation capital spell their end? Only time will tell. 

I don’t see them losing any capital? They just aren’t changing the name like they planned. Which I thought was a bad idea anyway.

[Garufa]

So S&W, the gun manufacturer (and traditional best) is being spun off so to speak and compartmentalized shortly after the Supremes refuse to hear a case regarding liability of gun manufacturers.

Coincidence?  I think not.

[DaveTN]

11 hours ago, Garufa said:

So S&W, the gun manufacturer (and traditional best) is being spun off so to speak and compartmentalized shortly after the Supremes refuse to hear a case regarding liability of gun manufacturers.

Coincidence?  I think not.

I think this is more about investor hand holding and less about liability. When a company gets sued, everybody involved in any, shape, or form is named. Playing a “Name Game” will have Zero impact on liability.

So yes, it’s a coincidence, it’s not based on a SCOTUS decision made 3 days ago. 

[jpx2rk]

It's all about the stock price, stock holders, and market share. And YE bonuses for the top dogs there.  Nothing more.  

[MacGyver]

When you’ve gone down the private equity route for as long as they have, suddenly being left out in the wind with less access to capital is not a good thing.  

You can read this as, “we’ve pillaged all we’re likely to get, so let’s push all the future risk off onto shareholders.”

[Garufa]

14 minutes ago, MacGyver said:

 You can read this as, “we’ve pillaged all we’re likely to get, so let’s push all the future risk off onto shareholders.”

This shareholder wishes he dumped his stock when it hit $30/share a couple of years ago.

[MacGyver]

37 minutes ago, Garufa said:

This shareholder wishes he dumped his stock when it hit $30/share a couple of years ago.

No doubt. 

[btq96r]

53 minutes ago, MacGyver said:

When you’ve gone down the private equity route for as long as they have, suddenly being left out in the wind with less access to capital is not a good thing.  

For those who might like a graphic illustration on Mac's statement...

S&W/AOBC= Wile E. Coyote