The public's scrutiny of Congress members trading stocks and options has intensified as websites and social media increasingly broadcast the disclosed data. Calls to ban congressional members from trading stocks and options have increased, and legislation was recently introduced to enact such a measure.
One member of Congress, who has drawn scrutiny over previous trades, is seeing the timing of a purchase of a small biotech stock questioned.
What Happened: Small-cap biotech company Humacyte Inc HUMA announced a SPAC merger in 2021 to go public. The company is working on developing implantable bioengineered human tissues and organ systems.
Shares of the small biotech company were purchased by Senator Tommy Tuberville (R-AL) several times in 2022 and 2023, with the following transactions:
- March 30, 2022: Buy $15,000 to $50,000 of HUMA shares
- July 25, 2023: Buy $1,000 to $15,000 of HUMA shares
- July 25, 2023: Buy $1,000 to $15,000 of HUMA shares
- July 25, 2023: Buy $1,000 to $15,000 of HUMA shares
Tuberville has been a Senator serving the people of Alabama since 2021. Prior to a political career, Tuberville was a college football coach for the University of Cincinnati, Texas Tech University, Auburn University and the University of Mississippi.
Tuberville serves on the Senate Armed Services Committee, which has drawn increased attention with Humacyte being involved in humanitarian efforts in Ukraine.
According to Humacyte’s website, the company is “providing humanitarian aid for vascular trauma injuries in Ukraine hospitals.”
Humacyte collaborated swiftly with regulators, including the FDA in the U.S., to send its investigational HAV (Human Acellular Vessel) to Ukraine for humanitarian use.
On Tuesday, Humacyte shared the clinical performance of its HAV from the Ukrainian Humanitarian Program. The company said its HAV had been provided to five hospitals on the frontlines in Ukraine since June 2022. The technology has been used to treat 19 patients in Ukraine as of July 2023.
“The HAV demonstrates enormous promise for treating critical injuries, both in overseas conflicts and civilian settings here at home,” Humacyte CEO Laura Niklason said.
The connection between Humacyte and Ukraine has drawn attention to several notable Twitter accounts that track the trading activity of members of Congress.
“July 25: Senator Tuberville buys the penny stock $HUMA. Yesterday: $HUMA announces that its tech was used to treat combat injuries in Ukraine. Tuberville sits on the Armed Services Committee. $HUMA has risen 57% since his trade,” Quiver Quant tweeted.
In another tweet, QuiverQuant said politicians rarely trade stock in companies “as small as Humacyte.”
“It’s VERY strange that the trades were so well-timed especially given Tuberville’s committee assignments.”
UnusualWhales, which is the data provider of two congressional trading ETFS, also chimed in on Tuberville’s history with the stock.
“Tommy Tuberville bought $45k in $HUMA, a penny biotech stock on July 20th & $50k RIGHT WHEN the Ukraine war started. Humacyte is now +46% due to their tissue implants used in the Ukraine war. Tuberville sits on the Armed Services Committee. Unusual,” UnusualWhales tweeted.
Benzinga has contacted Tuberville for comment on this story.
Related Link: 10 Best Stock Traders In Congress In 2022
Why It’s Important: Humacyte shares traded between $6.51 and $7.01 on March 30, 2022, and between $2.84 and $2.97 on July 25. Tuberville’s latest three trades would be up between 54.2% and 61.3% today, while his trade in 2022 would still be down from the purchase price.
Tuberville has been mentioned for unusual stock trades in the past. Tuberville purchased shares of multichannel commerce platform company ChannelAdvisor several times in 2022. Months after his last purchase, an acquisition of the company by privately held software-as-a-service company CommerceHub was announced. The acquisition likely netted the Senator a profit of $59,677.36 to $149,193.62.
Tuberville also purchased shares of Intel Corporation INTC in August 2022 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 bill banning Congressional stock trading from Sen. Kirsten Gillibrand (D-NY) and Sen. Josh Hawley (R-MO) was recently introduced. Under the terms of the bill, members of Congress, and other government branches, would not be able to own stocks in individual companies, even those located in blind trusts.
“It is critical that the American people know that their elected leaders are putting the public first, not looking for ways to line their own pocket,” Gillibrand said in a statement.
The bill calls for penalties for those who violate the rules, including the forfeiture of any profits from the trading and fines of $10,000 or more.
A previous report from Business Insider found that Tuberville was late in disclosing around 130 stock trades from January to May 2021.
A report from the New York Times highlighted that 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.
HUMA Price Action: Humacyte stock trades at $4.58 at the time of writing, versus a 52-week trading range of $1.96 to $5.60. Shares of Humacyte are up 117% year-to-date in 2023.
Read Next: Members Of Congress Buy Energy, Defense stocks Prior To Russian Invasion Of Ukraine
Photo: Unsplash
© 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.
