Public Companies Now Accounting for Mass Shootings as Risk Factor in Disclosures

By:
Chris Gaetano
Published Date:
Aug 7, 2019
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Several public companies have cited mass shootings as potential risk factors in their financial reports alongside more prosaic items such as pending litigation and supply chain bottlenecks, according to the Wall Street Journal

For instance, in its April 2019 annual report, arcade chain Dave and Busters, warned investors that "Any act of violence at or threatened against our stores or the centers in which they are located, including active shooter situations and terrorist activities, may result in restricted access to our stores and/or store closures in the short-term and, in the long term, may cause our customers and employees to avoid visiting our stores. Any such situation could adversely impact cash flows and make it more difficult to fully staff our stores, which could materially adversely affect our business."

Other companies that mentioned mass shootings—such as those that recently took place in El Paso, Texas; Dayton, Ohio; and Gilroy, Calif.—include the Cheesecake Factory, Del Taco Restaurants, and Stratus Properties. Since securities law requires that companies disclose risk factors that could affect a firm's financial performance, as shootings become more common (255 this year alone), managers at these companies are increasingly warning investors about how such tragic events could affect their bottom line. 

The Journal said that most of these disclosures paint the risk in terms of customer traffic and company reputation. 

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