California ammunition background check law struck down

NEW YORK - A federal appeals court has ruled that California’s ammunition background check law violates the Second Amendment, according to a statement released by GrabAGun Digital Holdings Inc. (NYSE:PEW) on Friday. The company, currently valued at $366 million, has seen its stock decline nearly 27% in the past week, according to InvestingPro data.

The Ninth Circuit Court of Appeals decided 2-1 that California’s requirement for background checks before every ammunition purchase is unconstitutional in the case Rhode v. Bonta.

Six-time Olympic shooting sports medalist Kim Rhode, the lead plaintiff in the case, called the ruling an affirmation of constitutional rights.

"This ruling affirms the strength of our Constitution and the enduring rights of responsible citizens," Rhode said in the statement. "The Second Amendment guarantees more than just access—it guarantees trust, freedom, and the ability to participate fully in the traditions that define our nation."

Marc Nemati, CEO of GrabAGun, an online retailer of firearms and ammunition, expressed support for the court’s decision, stating it "preserves and protects our fundamental rights as Americans." The company’s stock has experienced significant volatility, trading near its 52-week low of $7.17, with InvestingPro analysis revealing 8 additional key insights about the company’s performance.

The California ammunition background check law had required residents to undergo verification before purchasing ammunition, similar to the process required for firearm purchases.

The ruling represents a significant legal development in ongoing debates about Second Amendment rights and state-level gun regulations.

The California Rifle & Pistol Association and the National Rifle Association were involved in supporting the legal challenge, according to the press release statement.

In other recent news, GrabAGun Digital Holdings Inc., an online firearms retailer, has commenced trading on the New York Stock Exchange under the ticker symbols PEW and PEWW. The company announced that it secured over $179 million in gross proceeds from its public listing. After accounting for secondary proceeds and transaction expenses, approximately $119 million remains. GrabAGun intends to use these funds to enhance its online platform and explore strategic acquisitions. These developments mark a significant step for the company as it aims to expand its market presence. The decision to allocate funds towards platform expansion and acquisitions indicates a strategic focus on growth. Investors may find these moves noteworthy as they reflect GrabAGun’s plans for future business development.

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