Gun money from BlackRock

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The largest shareholder in America’s largest gun manufacturers is not a reclusive billionaire or a 2A agitator with a heavy Reddit presence. It’s BlackRock, the investment giant, making Wall Street’s loudest game about social duties.

Why it matters: With great power comes little responsibility.

Cap Table: BlackRock owns a 16.18% stake in Sturm Ruger (NYSE: RGR), a 15.26% stake in Vista Outdoor (NYSE: VSTO) and an 8.3% stake in Smith & Wesson (Nasdaq: SWBI). .

  • BlackRock says none of those stocks, which are valued at $597 million as of Thursday’s close, are held in actively managed funds.
  • Instead, they’re in passive funds that are tied to third-party indexes (i.e., BlackRock doesn’t choose which stocks to include). BlackRock also offers custom products for customers who prefer to stay away from firearms; Products made after the 2018 high school massacre in Parkland, Florida.

Data: Yahoo Finance; Graphics: Thomas Oide/Axios

What they said: BlackRock regularly emphasizes the value of ESG and conscious capitalism, including specific comments on how gun manufacturers should do more to prevent misuse of their products. According to Parkland, the company said:

“The recent tragedy in Florida has exposed BlackRock to the terrible toll of gun violence in America. We believe this event will require responses and action from a variety of entities in both the public and private sectors.”

What they have done: Very little. The company did manage to eventually get exposure from gun manufacturers, but there is no evidence that any of the companies made any policy or product changes to reduce gun violence. BlackRock doesn’t claim they did either. Instead, the firm just seems content to have had the conversation, and then lets business go on as usual:

  • For example, in 2020, BlackRock voted to re-elect all seven directors of Smith & Wesson. In 2021, it voted against a Director, Vice-Chairman and Chair of the ESG Board Committee, Michael Golden, stating, “The company does not meet our expectations for disclosure of material social policies and/or risks.”
  • But it supported all other Smith & Wesson directors as if Golden alone were the stumbling block. Opposing the full list would have been a much stronger statement of disapproval, even if it hadn’t resulted in a different outcome (Golden still sailed through). BlackRock also opposed a resolution tabled by Catholic nuns that Smith & Wesson should adopt a comprehensive human rights policy. It failed after garnering 44% shareholder support, meaning BlackRock’s vote would have overdone it.
  • BlackRock voted against two directors of Sturm Ruger in 2020 and 2021, but because of “board diversity” and not because of business practices or policies. It has also supported all Vista Outdoor directors in each of the past three years.
  • To be clear, BlackRock has no stake in Daniel Defense, the private Georgia company that made the guns that killed 19 Texas schoolchildren and two of their teachers this week.

The bottom line: This is not about my feelings towards gun manufacturers. Or yours. It’s about Black Rocks, and how his actions don’t match his rhetoric. And that’s important because as the largest outside shareholder in these companies, it could have far more leverage than you or I.

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