GrabAGun: The Second Amendment, Apprentice Style
GrabAGun, a company that bills itself as an online retailer of firearms, ammunition and other gun accessories, recently announced a merger with a holding company controlled by Omeed Malik. Malik, a former Bank of America executive who left the organization amid accusations of misconduct, was a major supporter of Donald Trump’s 2024 campaign and now owns a venture capital firm at which Donald Trump Jr. has been employed since November. The GrabAGun deal is an SPAC merger, where a special-purpose entity formed by Maalik raises capital through an IPO, places the investor funds in trust, and then uses the funds to acquire and merge with a target company (here, GrabAGun) which itself becomes public through the transaction. Some coverage of the deal suggests that this method was used because more conventional investing routes were not available due to corporate social responsibility concerns surrounding firearms. Trump Jr. was named an advisor to GrabAGun, will be a shareholder once the deal is concluded and the company goes public, and has given interviews with Malik trumpeting the company’s vision of appealing to younger Second Amendment and gun-rights supporters. The deal is valued at $150 million and set to close this summer.
Here, I’d like to provide a brief overview of the company and what the deal might signal about guns, Wall Street, and the second Trump administration more broadly. According to the press release, GrabAGun “is positioned to be a leading U.S. digital firearms mobile-focused retail platform for the next generation of buyers.” In addition to software that targets prospective buyers with specific advertisements and products, the company touts its compliance “with rigorous, comprehensive U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)-licensed regulatory and legal requirements.” The company’s website says it is the “lowest priced online gun dealer.” The online purchase process works as follows: (1) a customer browses the website and adds guns, ammunition, and other products to his or her cart; (2) at checkout, the customer selects a local federally-licensed gun store (or FFL) to which the products will be shipped and submits payment; and (3) the customer visits the FFL in person, completes required ATF forms and undergoes a background check, and takes ownership of the gun. The company’s website contains information about age minimum laws and warns that customers should “[b]e aware of restrictions on extended magazines and certain types of AR-15 style rifles”—it’s otherwise unclear, however, if and how the company’s own technology monitors purchaser compliance with federal, state, and local gun laws.
GrabAGun emphasizes its connection to Second Amendment rights. The press release announcing the transaction stated that the company “will defend the Second Amendment in the public markets against cancellation and corporate weaponization by opposition groups trying to take away Americans’ rights.” In an interview on Fox Business, Trump Jr. emphasized that the company’s business model “doesn’t bypass any rules” and added,
when you look at some of the major retailers, you know, that were some of the biggest firearm distributors in the country, Walmart being number 1 for a while—they no longer do it. Dick’s Sporting Goods, totally abandoning these sorts of things as they cater to woke areas of the government, woke areas of Wall Street . . . .
Trump Jr.’s remarks are primarily in reference to the post-Parkland backlash against the firearms industry that resulted in Dick’s, Walmart, and other retailers halting sales of certain semiautomatic rifles and sales of all firearms to individuals under age 21. Trump Jr. also mentioned an ongoing controversy regarding gun-specific merchant codes for credit card transactions that might be preserved in a customer’s banking records. Trump Jr. and Malik argued that GrabAGun provides an important service that other retailers are increasingly unwilling to provide—and Trump Jr. stressed his view that primary growth sectors for the company are young people and women with an increasing interest in buying guns for self-defense and doing so online. This is merely Trump Jr.’s latest venture in the gun-rights space. He previously launched his own gun-rights group in 2022 and has referred to the Second Amendment as “the whole ballgame [and] the freedom that protects all of our other freedoms.”
The timing of the GrabAGun deal is fascinating due to the current focus among gun-rights plaintiffs on challenging state and federal age restrictions. A number of federal courts, including at the appellate level, have recently invalidated state restrictions on the purchase, possession, or carrying of firearms by 18-to-20-year-olds. And the Fourth Circuit is set to hear oral argument on January 30 in a major case challenging the federal ban on federally-licensed gun dealers selling handguns to individuals under age 21. Two district judges within the circuit struck down the FFL provision under the Second Amendment, and we covered the first such decision here. Depending on additional post-Rahimi decisions set to be handed down soon, including the Eleventh Circuit’s en banc decision in a case challenging Florida’s post-Parkland age minimum for long-gun purchases, the legal question may be teed up for Supreme Court review in the coming months.
A major piece of Trump Jr. and Malik’s pitch for GrabAGun is the appeal of online gun purchasing to a younger generation of potential gunowners who are more familiar and comfortable with online shopping generally. Whatever the merits of that position as a business matter—the requirement to visit a physical store to actually obtain a firearm seems to largely eliminate any perceived convenience of an online marketplace—the company’s intent is clearly to appeal to a younger crowd. Data suggest that many COVID-era gun purchases were by first-time gunowners and that these buyers were, on average, significantly younger than pre-pandemic gun owners. 86% of those who purchased a gun for the first time during the pandemic were under age 45, compared to only 41% of pre-pandemic gun owners. Another study similarly indicates that the average age of COVID gun purchasers was far lower than that of pre-COVID gunowners, with especially large increases in the 18-29[1] and 30-39 age groups. Interestingly, data also show that many of these new gun purchasers were liberal—at least, far more than has been typical (a phenomenon that’s been reported on consistently in the mainstream media).
In any event, there is a clear alignment between GrabAGun’s business model and the push to relax firearm restrictions—especially point-of-sale restrictions—on young adults. The more such laws are scaled back or eliminated, the bigger the potential market for GrabAGun and other companies seeking to target younger gun-interested Americans in particular. The most consequential piece of the puzzle is likely the federal FFL handgun sale ban that was struck down in a Virginia case and on which the Fourth Circuit is set to opine, a restriction that dates back to the Gun Control Act of 1968. As handguns are by far the preferred weapon for personal self-defense and most new gunowners seem inclined to purchase firearms for that reason (and certainly did during the pandemic), the result of the Virginia case could well open an entirely new market for gun dealers like GrabAGun—or, at least, create millions of new potential customers overnight.
The Biden administration has defended the federal FFL handgun sale age minimum and is set to do so before the Fourth Circuit on January 30. And President Trump’s nominee for Attorney General, Pam Bondi, previously defended a similar Florida age restriction that was enacted in the wake of the Parkland shooting as state AG. The Florida case is ongoing—an Eleventh Circuit panel upheld the law in early 2023, that decision was vacated for rehearing en banc and stayed pending Rahimi, and a decision from the en banc court is expected shortly. The new administration, however, is now faced with the choice of whether to continue defending the federal handgun sale restriction before the Fourth Circuit or reverse course and agree that the law should be struck down. The Trump administration’s decision will almost certainly have major consequences for Donald Trump Jr.’s newest business venture.