One of the biggest merger and acquisition news items of the week has been the proposed buyout of United States Steel Corporation X by Japanese company Nippon Steel.
One member of Congress has been actively trading U.S. Steel shares and options in 2023.
What Happened: Nippon Steel is offering $14.9 billion including debt to purchase U.S. Steel, with current shareholders getting a proposed $55 per share. The deal comes months after Cleveland-Cliffs Inc CLF offered to buy the company for around $35 per share and was turned down.
The buyout could see many voice opposition against it with the United Steelworkers Union coming out and saying they do not support the deal.
Sen. John Fetterman (D-Penn.) said he would do everything he can to block the deal.
"The acquisition of U.S. Steel by a foreign company is wrong for workers and wrong for Pennsylvania. I'm gonna do everything I can to block it," Fetterman said Monday. The company headquarters is in Pittsburgh.
One member of Congress may be hoping the deal gets approved, which could make any involvement of the Senate a conflict of interest.
Sen. Tommy Tuberville (R-Ala.) has traded shares and options of U.S. Steel several times in 2023, including several recent transactions.
Data from Quiver Quant shows Tuberville made the following recent trades of U.S. Steel shares.
Nov. 7 (reported Dec. 15): bought $1,001 to $15,000 in U.S. Steel $20 puts, expiration June 21, 2024
Oct. 11 (reported Nov. 16): bought $1,001 to $15,000 in U.S. Steel $25 calls, expiration June 21, 2024
Oct. 11 (reported Nov. 16): sold $1,001 to $15,000 in U.S. Steel shares
Oct. 11 (reported Nov. 16): sold $15,001 to $50,000 in U.S. Steel shares
The recent sales of U.S. Steel shares and the put options could turn into bad trades from Tuberville with U.S. Steel shares hitting 52-week highs of $50.20 on Monday and worth a potential $55 if the acquisition is approved.
Tuberville's purchase of calls with a $25 exercise price are now worth significantly more than they were bought for, netting a nice potential profit for the Senator.
One X user was quick to point out the potential conflict of interest for Tuberville given his committee appointments in Congress.
"Not only did Sen. Tommy Tuberville buy puts on US Steel, he also sits on the Senate Commodity Subcommittee which directly oversees the steel industry. It's illegal for athletes to bet on games, but legal for Politicians to bet on companies they regulate," Twitter user PelosiTracker tweeted.
The X user went on to discuss the conflict with his purchase of the calls.
"Those calls are up 170%+. So yes, he lost $15k on his puts, but ended up making 170%+ on his calls. He also sits on the Senate Commodity Subcommittee which directly oversees the steel industry."
Related Link: X Marks The Spot For Twitter: US Steel Buyout Could Open Door For Musk To Claim Stock Ticker
Why It's Important: Tuberville has been one of the most active stock traders in Congress and was recently making headlines for his trade involving Tesla Inc TSLA shares.
Tuberville previously bought between $3,000 and $45,000 in puts on Tesla with a $190 exercise price. The puts, which had an expiration date of Dec. 15, 2023, recently expired worthless with shares of the electric vehicle company well over $200.
"Gluttons for punishment," Tesla CEO Elon Musk said when someone pointed out Tuberville's trades on X.
Several of Tuberville's past stock trades have raised red flags, as shared by Benzinga.
Tuberville bought shares of small-cap biotech company Humacyte Inc HUMA several times in 2022 and 2023. The company has been working with Ukraine on humanitarian efforts. Tuberville serves on the Senate Armed Services Committee, which drew concerns of a conflict of interest with the trade.
Tuberville previously bought shares of multichannel commerce platform company ChannelAdvisor several times in 2022, with the company getting an acquisition offer months later, which turned into a profit for the Senator.
The Senator also purchased shares of Intel Corporation INTC several days before the CHIPS Act was signed into law by President Joe Biden. The CHIPS Act gave $50 billion in funding to microchip companies, including Intel.
Tuberville’s trades have previously been flagged by UnusualWhales, who called out a history of the senator being slow to disclose trades. CongressTrading on Twitter also shared the senator’s potential conflicts of interest.
"You voted for Senator Tuberville to represent you, instead he's trading cattle, wheat and corn contracts. Btw he sits on Senate Agriculture Committee," Congresstrading tweeted in September 2021.
A previous report from Business Insider found Tuberville was late in disclosing around 130 stock trades from January to May 2021.
A report from the New York Times highlighted Tuberville bought or sold stock and options in 17 companies that had business in front of Senate committees on which he served.
Representatives for Tuberville told the Montgomery Advertiser previously that he has financial advisors who manage his portfolio.
While some members of Congress have supported a ban on stock and options trading, Tuberville has opposed such a measure in the past, calling it "ridiculous."
Tuberville said a ban on stock trading could discourage some people from joining Congress, as reported by The Independent.
"I think it would really cut back on the amount of people that would want to come up here and serve, I really do. We don't need that," Tuberville told The Independent.
Read Next: 10 Best Stock Traders In Congress In 2022 (Spoiler: Nancy Pelosi Isn’t No. 1)
Photos: Tommy Tuberville, Shutterstock; Courtesy U.S. Steel; Courtesy Tesla Inc
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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