The end of the Obama firearm "surge"
Since the election of President Obama, conservative media figures such as Glenn Beck, Ann Coulter, and G. Gordon Liddy have advanced the false narrative that Obama is going to "take away your gun ." This media hype quickly created a classic bubble in the market for guns and ammunition.
In a typical segment on the subject from April 6, 2009, Glenn Beck stated  on his radio show that the president would:
Slowly but surely take away your gun or take away your ability to shoot a gun, carry a gun. He will make them more expensive; he'll tax them out of existence. He will because he has said he would. He will tax your gun or take your gun away one way or another.
This fearmongering by the conservative media followed a $15 million campaign  by the National Rifle Association (NRA) attacking Barack Obama during the 2008 presidential election. As documented by Factcheck.org, the NRA campaign included a series of attacks that badly distorted  Obama's actual policy positions:
A National Rifle Association advertising campaign distorts Obama's position on gun control beyond recognition.
The NRA is circulating printed material and running TV ads making unsubstantiated claims that Obama plans to ban use of firearms for home defense, ban possession and manufacture of handguns, close 90 percent of gun shops and ban hunting ammunition.
But as people have realized that the Obama administration has no covert plans to institute sweeping gun seizures, gun sales have fallen dramatically. In addition, executives say that many of the guns bought in reaction to Obama's election are now being re-sold on the secondary market, further depressing new gun sales. Public-earnings calls by two industry leaders  detail the magnitude of the fear-based bubble that was created and perpetuated by the conservative media.
Sturm, Ruger & Co., Inc.
On their third quarter earnings call Sturm, Ruger & Co. announced that their earnings fell a nickle a share, from $0.37 per share to $0.32 per share (a 14 percent drop), due largely to a lack consumer demand. On an October 28 earnings conference call, Michael Fifer, the company's CEO, explained the drop like this  (registration required):
FIFER: We're pleased with this year's third quarter sales and earnings compared with those in 2009 because the third quarter of 2009 benefited from the post-election surge in demand to some degree.
FIFER: We see our own sell-through of auto-loading rifles in the third quarter has declined year over year, which is an expected outcome of the post surge market place. But we're hearing that there's a flood of very new used auto-loading firearms at retail. Some of the consumers who rushed out to buy these firearms last year are back in the stores converting these firearms to cash. And current buyers can choose from an array of slightly used auto-loading rifles at discounted prices as well as all the new auto-loading rifles. Our distributors are telling us that they do not believe we have lost any market share, and that may be true when considering only new firearm sales, but it is likely that used firearms took an increased share of the total firearms transactions during the quarter, and our sell-through numbers do not reflect used gun transactions.
Smith and Wesson
Firearms company Smith and Wesson discussed the now dissipated gun purchase surge during their December 8th earnings call. Smith and Wesson President and CEO Michael Golden and President of Firearms Business James Debney told investors  (registration required):
GOLDEN: The consumer environment with the firearms industry appears to have returned to levels no longer driven by fear of increased gun control or political uncertainty. This is supported by our recent research which shows that consumer purchasing today is driven primarily by personal protection and shooting sports. Political concerns are now a distant fourth. This is reflected in our current sales in most firearms categories, which are lower than the record sales last year for both the industry and our company.
DEBNEY: Indications are that the consumer firearms market has now moderated following the post-election surge that started in the second quarter of fiscal 2009 and ended during the second quarter of fiscal 2010. As a result, our handgun sales were slightly down, while our tactical rifle and Walther products were significantly reduced compared to the prior year quarter.
Smith and Wesson's Michael Golden indicated that reduced demand for firearms  is an industry-wide phenomenon, saying: "We are continuing to operate under challenging industry conditions with reduced consumer spending and difficult year-to-year comparisons to prior year surge levels."