Jan. 24 (Bloomberg) -- Smith & Wesson Holding Corp. said it will stop offering new versions of semiautomatic pistols in California because of a law requiring the weapons to stamp identifying data onto bullet casings when the guns are fired.
The law, signed by Governor Arnold Schwarzenegger in 2007, requires that new or updated semiautomatic handgun models be equipped to imprint the make, model and serial number of the gun on each cartridge case, using a technique known as microstamping.
California’s firearms laws are among the most restrictive in the U.S. The state passed the nation’s first assault-weapon ban in 1989. Microstamping, intended to aid police in solving crimes, is opposed by gun-rights advocates who say the additional cost penalizes lawful gun owners.
The technology is “unreliable, serves no safety purpose, is cost prohibitive and, most importantly, is not proven to aid in preventing or solving crimes,” Springfield, Massachusetts-based Smith & Wesson said yesterday in a statement.
The restriction was supposed to take effect in 2010. It was delayed until the state attorney general’s office determined in May that microstamping technology was available to manufacturers unrestricted by patents, a condition of the bill when it was enacted. A gun-rights group, the Calguns Foundation, paid to extend the existing patent in an attempt to forestall the law.
“If I can’t get the guns, I can’t sell them, I can’t make money and I can’t make my customers happy,” said Don Schmidt, co-owner of Schmidt & Titoni Firearms & Accessories in Santa Rosa, California.
The National Shooting Sports Foundation and the Sporting Arms and Ammunition Manufacturers’ Institute have filed a lawsuit to invalidate the law.
Smith & Wesson reported record sales of $588 million for the fiscal year that ended April 30, up 43 percent over 2012. Shares reached $14.99 on Jan. 10, the highest since 2007.
“While it’s the most populous state, I think it’s not the biggest state for gun sales,” said Brian Ruttenbur, an analyst at CRT Capital Group LLC in Stamford, Connecticut, referring to California. He rates Smith & Wesson a buy.
“There’s long-term demand for firearms across the United States, and that demand is not on your coast,” he said. “It’s in the heartland.”
Smith & Wesson fell 29 cents, or 2 percent, to $13.92 at the close in New York yesterday.
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