House Speaker Nancy Pelosi’s husband profited from a bullish options bet on Google-parent Alphabet in a well-timed transaction a week before Congress voted on antitrust legislation that could severely limit how big tech conducts its business.
In a financial disclosure signed by Nancy Pelosi July 2, her husband Paul Pelosi reported exercising call options to acquire 4,000 shares of Google parent Alphabet at a strike price of $1,200. The trade netted him a $4.8 million gain, and it has since increased to $5.3 million as share prices rose, Bloomberg reported.
Call options are a good tool for an investor who believes the stock price will go up in the future. They give the buyer the right, but not the obligation, to buy stocks or other assets at a specified price within a specific period. The stock is called the underlying asset. A call buyer profits when the price of the underlying asset goes up.
A week after Paul Pelosi completed his transaction, the House Judiciary Committee advanced six bipartisan antitrust bills, four of which target Google, Amazon, Apple and Facebook. One of the bills aims to prohibit big tech platforms from giving precedence to their own products and services. Another would prevent tech giants from acquiring competitor companies.
The market reaction was muted. Instead of going down, share prices rose “after investors found the House proposal to be no real threat,” Yahoo Finance reported. Alphabet’s share price increased 3.2 percent after the judiciary panel approved the legislation.
Paul Pelosi made a fortune in real estate and venture capital in the San Francisco area. His transactions are not thought to violate any laws regarding members of Congress, their spouses and insider trading.
However, “Nancy Pelosi insider trading” began trending on Twitter.
“@SpeakerPelosi just made 7-figures exercising options in tech companies she regulates Please show me more blatant insider trading,” Jackson Moses tweeted @jamoses92.
“I would love to be in politics!! Especially on their level….of course they make money…they know whats going on,” Fernando Del Valle III tweeted @FD3Life.
“Nothing to see here, totally legit. Just super smart,” DinosaursAintReal tweeted @weasel425.
On May 21, Paul Pelosi also bought 20 call options for Amazon with a strike price of $3,000, expiring in June 2022, suggesting that he expects Amazon share prices to keep rising. He also bet on Apple, buying 50 call options with a strike price of $100 and the same expiration date.
Speaker Pelosi doesn’t own any stock and “has no involvement or prior knowledge of these transactions,” her spokesman Drew Hammill said Wednesday in an email statement to Bloomberg. Congress’s responsibility is to “the consumer and competition,” Nancy Pelosi told reporters in June.
It will be a while before the antitrust bills that target such a narrow set of companies become law, Bloomberg reported. The legislation still needs work before getting a vote in the House and would need the support of at least 10 Senate Republicans to pass, said Majority Leader Steny Hoyer.
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Great timing on stock market buying and trading isn’t exactly new in Washington, D.C. circles.
Republican senators Richard Burr and Kelly Loeffler had inside knowledge of the looming covid-19 threat from closed-door meetings in D.C. when they sold shares in January 2020. The former Sen. Loeffler, wife of New York Stock Exchange chairman Jeffrey Sprecher and wealthiest member of Congress at the time, sold up to $3.1 million worth of stock. Burr sold $1.7 million worth of stock.
Congress members are banned from trading based on non-public information learned during their official duties, but it is difficult to charge them with insider trading, Yahoo News reported. Neither Loeffler nor Burr faced charges.
“There has been concern on both sides of the aisle about the consolidation of power of the tech companies and this legislation is an attempt to address that,” Pelosi told reporters. “…in the interest of fairness, in the interest of competition, in the interest of meeting needs of people who are whose privacy whose data and all the rest is at the mercy of these tech companies.”