Former Speaker of the House Nancy Pelosi is one of the most-watched members of Congress when it comes to buying and selling stocks and options. Many of the trades made by Pelosi and her husband Paul Pelosi are closely monitored, as they often come with accusations of trading on insider information.
Here's a look back on a controversial trade from 2022 and how Pelosi may have lost big.
What Happened: Pelosi and her husband announced in a filing that they sold 25,000 shares of Nvidia Corporation NVDA July 26, 2022. The filing showed the couple took a loss on the trade.
The Pelosis sold 25,000 shares of the semiconductor stock at an average price of $165.05. The couple took a loss of $341,365 on the trade, which was valued between $1 million and $5 million.
The trade was controversial at the time, as Pelosi faced public scrutiny over exercising calls of the semiconductor company ahead of a vote on the CHIPS Act by Congress, which Pelosi publicly supported.
The CHIPS Act was seen as something that could directly benefit Nvidia.
Experts also questioned the way the Pelosis disclosed the trade.
“It is surprising to see the sale. Also, what’s surprising here is that she sold and reported one day later. Usually she takes a couple of weeks. She wanted the public to know she cleared the books of this conflict of interest immediately,” the founder of Congresstrading.com, who asked to remain anonymous due to the sensitive nature of his site, previously told Benzinga.
The transaction came before Congress voted on the CHIPS Act. Nvidia shares had risen heading into the vote.
The sale by the Pelosis could have been done for numerous reasons, including public pressure over a potential conflict of interest. Others questioned the timing of the sale due to semiconductor companies later facing pressure on exports to China and Russia.
Nvidia shares dropped 18% in the three months after the congresswoman sold the position, which saved a potential additional loss of $753,250 at the time.
Additionally, 50 options on Nvidia with a strike price of $100 and expiration of Sept. 16, 2022 were sold on Sept. 16, 2022 for a loss of $361,476 by the Pelosis.
Related Link: Nvidia Stock Goes Parabolic After Chipmaker Reports Q1
Why It’s Important: While the sale of Nvidia by Pelosi may have been done to help save face and give in to public pressure, it also came with a six-figure loss, something that could have been avoided if the couple still held their position today.
Nvidia reported first-quarter financial results and guidance this week that each came in significantly ahead of analysts’ expectations. Many analysts said they had never seen a guidance raise that was as high as the company announced thanks to its lead in the artificial intelligence space.
Nvidia shares hit an all-time high of $394.80 on Thursday and are trading at $378.24 at the time of writing.
Based on a price of $378.24, the 25,000 shares of Nvidia would be worth $9,456,000 today. The original sale price by the Pelosis based on the $165.05-per-share average was $4,126,250.
This means Pelosi and her husband missed out on potential profits of $5,329,750.
Pelosi was one of the top 10 traders among Congress members in 2021, but saw a loss of 19.8% in 2022, according to data from UnusualWhales.
Pelosi has often been asked if her husband, who is a venture capitalist, gets any information based on her activity in Congress.
There have been growing calls to ban members of Congress and their spouses from trading, with many pointing to the success of the Pelosis in the market over the years. Sen. Josh Hawley (R-MO) has introduced the PELOSI Act, also known as the Preventing Elected Leaders from Owning Securities and Investments Act.
While the Pelosis sold their NVDA shares, Congresstrading shared the names of several members of Congress who bought the stock in April.
Photo via Shutterstock.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
