Taser maker Axon's shares jump 20% on George Floyd protests
Shares of Axon, which makes Taser stun guns and police body cameras, are up more than 20% since Thursday, when protests erupted across the U.S. in response to the death of George Floyd while in Minneapolis police custody.
In Monday trading, Axon's stock price jumped to nearly $90, up from $73 on Thursday. The rise added $1.2 billion to the company's stock market value, pushing its total worth to just over $5 billion.
An analyst at Oppenheimer identified Axon as one company that could benefit from any effort to reform police forces around the country and reduce deaths during protests and street violence. Wall Street analysts expect its sales to rise more than 30% over the next two years, according to research firm FactSet.
Axon CEO Rick Smith, like other CEOs in America, released a statement over the weekend that called Floyd's death a tragedy and that his company "empathizes with the citizens and communities who are angry" following the fatal arrest captured by an array of video cameras on the street, in nearby stores, in the hands of passersby and on the bodies of police officers.
"We know that our society faces major, deeply entrenched challenges," Smith wrote in the statement posted on Axon's corporate website. "We will listen and continue to learn how we can be a part of fixing what is broken.
Axon changed its name from Taser in 2017. The following year it acquired VieVu, a maker of body cameras for police departments and others. VieVu's website says its mission is "safeguarding officers' safety, perspective, reputation and lives."
Axon still gets more than half its annual revenue from its stun gun. The rest comes from the company's sensors unit, which includes body camera sales. Axon also provides software that allows police departments to store and analyze the footage. In the past few years, the company has been emphasizing its software capabilities.
The company's total revenue rose almost 50% last year to nearly $500 million, but nearly all that growth came from its sensors business, according to FactSet. Taser sales were up about 11%. Axon has struggled with rising costs as it has grown its businesses. The company's profits fell last year more than 90% to just $2 million, down from $28 million in 2018.
Questions have been raised in the past about the safety of the Taser stun gun. In 2011, 60 Minutes reported that nearly 500 suspects had died around the country after being tased by authorities. The company at the time said that only 20 of those deaths could be directly related to its product.
Axon told the Associated Press in 2017 that 15 people had caught fire and five had died after being shocked by a Taser. But the company sought to minimize the risks, saying that represented only a handful of incidents for a device that had been in use for nearly 25 years.
More recently, video surfaced of police trying to search Ahmaud Arbery's parked car. In the 2017 video, an officer pulls a Taser on Arbery, but the device malfunctions. Arbury was killed Feb. 23 after a pursuit by a white father and son who armed themselves after seeing the 25-year-old black man running in their subdivision.
Investment firm Spruce Capital, which last year had shorted, or bet against, Axon's stock, rated shares of the company a "Strong Sell." A report from Spruce on the company said the market for Tasers was saturated and had limited room for growth in the U.S.
Axon at the time said Spruce's report was "poorly researched" and inaccurate.
Spruce founder Ben Axler, told CBS MoneyWatch, "While rioting and social instability may have a short term beneficial impact for Axon, our longer term concerns about sustainable growth, margin expansion opportunities and governance remain."