It was only a matter of time. The libertarian-minded folks at Defense Distributed have done what even critics thought was impossible by making and firing a gun whose parts are all made from plastic.
Naturally, those who see the proliferation of guns as a threat to peace and order went ballistic dredging up the thought of criminals opening up plastic-gun-making shops in basements all across the country. Of course, most criminals aren't following the laws anyway in getting a gun, so those hoops gun buyers jump through are reserved for law-abiding citizens.
What Defense Distributed did in effect was remove the dog-and-pony show. The average American citizen who wants to own a gun for personal safety and protection can now do so. It's no coincidence that Defense Distributed named its gun "Liberator" after the small, cheaply made handgun that was designed to be air-dropped into Nazi-occupied France during World War II.
But plastic guns come with some big caveats.
First, you need to get yourself an expensive, high-end 3-D printer. To print out the gun's 15 plastic parts -- there's one non-plastic part: a common store-bought nail used as the firing pin -- they used an $8,000 secondhand Stratasys (SSYS 1.43%) printer, secondhand because the company seized the first one the group leased when it realized what they were up to.
Next you need to get the specialized materials to print out the different ABS plastic parts, which also don't come cheap. So for just under $10,000 you can make yourself a gun that you could otherwise buy for $500.
That's why Smith & Wesson Holding (SWBI 1.82%) and Sturm, Ruger (RGR 1.10%) aren't sweating bullets about this development. There are limitations to what the gun can do and hurdles that might be even more difficult to surmount.
Sure, prices will come down over time; 3D Systems (DDD 2.36%) makes a consumer version of its printers that goes for around $1,000 and RepRap offers open-source ones for even less, but Defense Distributed had to use the Stratasys printer because it has patented technology that heats the printing chamber to a certain temperature. The gun maker believes that's one of the reasons the barrel is able to withstand a round being fired through it without deforming.
Moreover, the Liberator can only currently fire a .380-caliber round. When a different round was shot through it, the gun blew apart. There's also a reticence among companies to allow their property to be used for this purpose. In addition to Stratasys seizing its printer, Defense Distributed also had its lease on workshop space revoked.
Then there's Thingiverse, a community site where 3-D designs can be uploaded for printing. MakerBot, which runs the site as well as makes its own 3-D printers, has begun removing gun plans from it. Defense Distributed has resorted to hosting its own site and is trying to upload as many of the banned designs as it can find. But as it hinted at in an April Fool's Day prank, it's always possible the government might come in and simply seize the website.
We've seen this level of concern before about plastic guns, particularly when Glock came out with its largely nonmetallic gun in the 1980s. The stated fear was its alleged ability to defeat metal detectors, but that proved to be unfounded.
Yet it's also apparent the American public wants to own guns. Through April 30, the FBI reports that 8.7 million background checks were performed on individuals wanting to buy a firearm. While it cautions that you can't extrapolate one-for-one background checks to firearms sales, it's still a pretty good indicator of the demand out there. For comparative purposes, the number of background checks in the first four months of 2013 is more than all the checks performed for the full year of 2004. It's also running 39% ahead of 2012, the year with the greatest number of background checks ever performed for this purpose.
It should come as no surprise, then, that Sturm, Ruger and Smith & Wesson are shooting out the lights with their earnings. Backlog at Ruger is double what it was a year ago, and is more than triple at S&W. Ammo shortages are everywhere as well, leaving even police departments begging for rounds. With no sign of demand abating, plastic guns -- despite their appeal as a weapon for the masses -- won't be eating into their profits anytime soon.
"Plastics" was the advice given to Dustin Hoffman in the movie The Graduate as the product of the future, and that might still be the case when it comes to guns. But when it comes to investing, I maintain that the cold steel of a gun made by Smith & Wesson or Sturm, Ruger is what investors should have in their sights.
