As consumers pressure corporate America to act in the wake of last month’s mass shooting at Marjory Stoneman High School in South Florida, one of Wall Street’s highest-profile companies finds itself in an awkward position: Goldman Sachs.
In 2017, Goldman’s private equity arm helped finance Bass Pro Shops’ roughly $4 billion purchase of hunting and sporting good retail rival Cabela’s. The bank contributed approximately $1.8 billion in preferred equity to the deal. It was the largest investment of the bank’s first new private equity fund since the financial crisis.
That bet makes it awkward for the bank to come out with a stance on gun control, as corporate America is now being called on to do. There is ongoing debate about the fairness of that expectation and what the appropriate response should be. Still, financial instiutions like BlackRock and Bank of America have vocally weighed in on the matter.
In a statement provided to CNBC, Goldman Sachs said: “We are saddened by recent events, especially the tragedy in Florida last month. We are in touch with management at Bass Pro/Cabela’s and know they are deeply concerned and focused as well.”
Goldman Sachs’ ownership stake in Cabela’s is small, and the company does not have a board seat. Its equity is “preferred” which, in layman’s terms, means it is more akin to a financing tool than it is to ownership. It nonetheless forges a connection between Goldman and guns at a time at which scrutiny of the firearms industry is high. Goldman declined to disclose the size of the stake.
The alleged gunman who massacred dozens of people in Las Vegas is said to have bought a gun at Cabela’s, according to multiple reports. (The retailer reportedly has since gotten rid of bump stocks, which are a legal attachment that makes guns fire faster.)
Goldman did not issue a statement in response to the Las Vegas shooting, though did provide a comment to Axios about its previous investment in SureFire, a high-capacity magazine that TMZ alleged was used in the massacre. (Goldman said SureFire moved into magazines after its investment, against its wishes. Its stake in the company is currently for sale, a source familiar with the matter tells CNBC.)
Cabela’s/Bass Pro is one of the few national retailers that has not publicly issued new gun restrictions in the wake of the Florida shooting, despite vocal measures taken by Walmart, Kroger and Dick’s Sporting Goods, among others.
It is also one of the most reliant on the industry, heavily steeped in hunting culture. Outdoor products including guns comprised roughly half Cabela’s sales, according to securities filings from before its sale to Bass Pro. The retailer has gun libraries on its grounds and displays taxidermy in its stores. It is one of a thinning number of national stores that still sell AR-15 assault rifles, the weapon allegedly used by the Parkland shooter.
Neither Cabela’s nor Bass Pro responded to CNBC’s requests for comment.