Purchase of Stock Via Call Options
Barron’s reports Nancy Pelosi’s Husband Bought Roblox, Microsoft Stock
Speaker Nancy Pelosi’s husband just disclosed he bought Roblox stock the day it went public, and acquired Microsoft stock through options.
The Barron’s article is behind a paywall. Fox News also reports the same thing: Pelosi’s Husband Bought $10M in Microsoft Shares Through Options.
House Speaker Nancy Pelosi’s husband purchased millions of dollars worth of Microsoft (MSFT) and Roblox (RBLX) shares last month, new financial disclosures form reveal.
Paul Pelosi exercised call options and paid $1.95 million to buy 15,000 shares of Microsoft at a strike price of $130 on March 19, according to an April 9th filing with the House clerk. That same day, Pelosi, who owns and operates a California venture capital investment and consulting firm, paid $1.4 million for 10,000 shares valued at $140 apiece.
Since Pelosi made the purchase, Microsoft share prices have climbed from about $230 to roughly $255 – an increase of close to 11% – after the company secured a lucrative government contract worth nearly $22 billion to supply U.S. Army combat troops with augmented reality headsets. The deal was announced on March 31.
Extremely Bad Looking
Comments by Krystal and Saagar
- This is an extremely bad look at the very least. And at worst, it’s outright corrupt.
- It has the appearance of using insider knowledge of where the US government is headed.
- Access to that knowledge if you are Speaker of the House you may have special insights in order to profit massively off of your stock trades.
- Nancy Pelosi is already a very wealthy woman.
- Why are members of Congress allowed to trade stock while they are holding public office?
- We covered this on the Republican side at the beginning of Covid.
- Even the appearance of this is so disgusting.
Nancy Pelosi Wealth
Nancy Pelosi in the 7th Richest Person in Congress.
Question of the Day
Q: How did Nancy Pelosi become so wealthy?
A: You tell me. Any guesses?
Here’s a Thought
https://twitter.com/jmtnsnow/status/1382095546622509063
Legal For Congress, Not You
Here are recent Pelosi Insider Moves. The list shows the Microsoft call options.
And here is a list of Senate Transactions you may be interested in.
If you had knowledge of this deal and made a similar trade, then got caught, you would be fined, lose all your profits, and potentially be thrown into jail.
Dear @AOC
Dear @AOC
Please Call on @SpeakerPelosi to resignNancy Pelosi’s Husband Uses Call Options to Buy Microsoft Ahead of Big Govt Contracthttps://t.co/kgpFzft4GS
— Mike “Mish” Shedlock (@MishGEA) April 13, 2021
Recall that Burr, other senators under fire for stock sell-offs amid coronavirus outbreak
Addendum
The stock market purchase was made on March 19, 2021 ahead of the deal as reported.
The option purchase was made 2020-02-28 not 2021-02-28.
Apologies offered. I failed to correctly note the options date.
Paul Pelosi also bought TSLA calls on 2020-12-22 with an expiration of 3/18/22.
That was ahead of Biden’s push for energy tax credits.
Important Ethics Issues for All of Congress
Please consider Nancy Pelosi’s Recent Stock Purchase Raises Important Ethics Issues For All Of Congress
Nancy Pelosi made some stock purchases last month that are raising eyebrows — and questions — about the ethics of Congresspeople buying and selling stocks. In December, Rep. Pelosi, the Speaker of the House, purchased 25 call options of Tesla stocks, along with a few other stock purchases. Why does this matter? Because under the Biden administration’s new agenda, with its focus on environmental protections and combating climate change, Pelosi could benefit financially from those political plans.
According to the disclosure, Pelosi (or her husband, Paul, who runs a venture capital firm) purchased call options at a stake price of $500. Since the calls were bought last month, shares of Tesla have risen from $640.34 to over $890. The call options are now valued at $1.12; they were purchased for between $500,000 and $1 million.
Questions of whether it’s ethical for members of Congress to buy and sell stock are not new. Last year, former Georgia Senator Kelly Loeffler was accused of insider trading and profiting off the coronavirus pandemic when she sold between $1.275 million and $3.1 million in stocks right after being briefed in January 2020 about the seriousness of the virus. In June of 2020, the investigation was dismissed by a Senate ethics panel. And since then, Loeffler lost her seat in the Senate to Democrat Raphael Warnock.
Another former Georgia Senator, David Perdue, was also criticized for potentially unethical stock purchases during the six years he spent in Congress. The Republican was investigated by the Justice Department for his stock market activity, though no wrongdoing was found (he, too, lost his recent re-election campaign to a Democrat, Jon Ossoff).
In the past, there has been legislation aimed at combating this. The STOCK Act, passed after the 2008 financial crisis, attempted to stop insider trading by making it illegal for government officials to trade stocks after receiving material or nonpublic information “derived” from their jobs, or information that they received while performing their jobs. In light of the Loeffler and Perdue activity, that bill has been re-examined and some people have argued it did not go far enough.
Other lawmakers agree, including Sens. Elizabeth Warren and Jeff Merkley. Currently, there is proposed legislation that would ban individual stock purchases by members of Congress. “After nearly four years of the most corrupt president in American history and with U.S. senators brazenly trading stocks to profit off a raging pandemic, the Anti-Corruption and Public Integrity Act is more urgent than ever,” Warren and other lawmakers said in a joint statement.
All of these transactions, dates, and timings look extremely bad at the very least.
One cannot prove the Pelosi trades are related to deals and timings just as one cannot prove Loeffler or Perdue were guilty either.
The charges against Loeffler and Perdue were widespread in the media. The charges against Pelosi will not get the same coverage.
Mish
This is a staggering post. I saw a responsibility of gratefulness is all together to share it. It is really what I expected to see in the future you will continue with happening as anyone may need to share such a perplexing post.
I read your blog zone absolutely and found to a charging degree unending information, it’s astonishing page fitting.
I am very happy to see you Mish putting down your hatred on Txxxp, stepping back, and then look at how corrupted the current administration is….
These numbers are not even close… Feinstein is worth over 2 BILLION. Her husband Dick Blume has made billions on no-bid government contracts and selling America out to the Chinese. Saying Pelosi or Feinstein’s Husband’s have a different pile of money is intentionally misleading.. Those two are criminals. America deserves the leaders and corruption it has… Go back to watching TV.
I want to know WHY they are not investigating these illegal issues. Are they going to look the other way like they have with the president’s meth head son? These people need to be prosecuted for their actions, but because they are all democrats like the so called president they can get away with these crimes! If it were you or me, we would have been in handcuffs by now, but Nancy and her hubby are comfy in their own beds? Not right! Lock her up!
Since we have NO representation in our government we all should stop paying our taxes, what can they do but make their own money at that point, instead of STEALING from the United States people!
So our country was founded on, “No taxation, without representation” well who in this country feels they are really being represented right now?
Queen Nancy was quoted as saying “let them eat cake!”
Mish I am really very disappoilnted in your cut and paste and failure to at least get the details correct before bashing any of it.
“Paul Pelosi exercised call options and paid $1.95 million to buy 15,000 shares of Microsoft at a strike price of $130 on March 19…. Since Pelosi made the purchase, Microsoft share prices have climbed from about $230 to roughly $255 – an increase of close to 11% – after the company secured a lucrative government contract worth nearly $22 billion to supply U.S. Army combat troops with augmented reality headsets. “
When was the actual option trade made? How much did he pay in premium? If we take the above at face value and knowing options – there is no free lunch – he must have paid at least $100/sh in premium on extremely deep in the money calls. I suspect that the actual trade date was far in the past, perhaps when msft was on a 100 handle.
Also – why are you subjecting congress to a standard different than anyone else? As long as they do not have first hand knowledge of the review/award of the contract they should be free to speculate like anyone else. I mean, this is not even rocket science is it? Requests for proposal are public (though perhaps specific requirements of DoD may not be) and it should be fairly easy to guess who will bid and who are in best position to win a contract.
In this case, why would anyone buy Microsft months ahead of time for a contract estimated to be $22B over many years? MSFT annual revenues are over $150B per year. This contract at most amounts to a 1-2% bump in revenues over a lont time period. It is not going to move the stock in any meaningful way.
Oversight is one thing, playing gotcha is another and does not help anything. As to Pelosi’s wealth – well if you had that portfolio in the past year you would have done extremely well (while taking on a ton of risk).
I am not quite so cynical as you are. I think that ALL lawmakers should be required to put their liquid assets in a blind trust. They should also be prevented from lobbying or getting paid by those who lobby directly or indirectly for at least ten years. That would at least help eliminate those who want to run for office in order to enrich themselves. However as you note in your addendum the timing of the option and stock buys was quite different than the headline. Also a $22B deal with Microsoft is not going to affect the stock price much. EVERYONE knew that Biden was going to push for green tax credits and incentives so that really wasn’t much insider information.
I think that the big thing with Loeffler and Perdue is that they sold based upon information that they received the day before AND they continued to downplay the severity of the Coronavirus in public. I have some sympathy for them in that it would take a tremendous amount of willpower not to avoid a loss if you knew one was coming. Perhaps congress could control their own portfolios but any buy and sell orders would be randomly assigned over the next 90 days.
And now the old hag wants my guns as well.
This is just a continuation of an old story. Pelosi has been insider trading for decades. Along with many other members of the house and senate.
in their eighties already….yet their ONE and ONLY drive is still the same : MONEY , more and more of it ! PATHETIC and utterly SICK, disgusting corrupt bunch !
In the 1970’s, when I began to be interested in politics, it was clear the billionaires where on the right wing, now they are almost all on the left. In the 1970’s, former CIA agents where also on the right side, now they proliferate on the left. A serious redefinition of “left” and “right” is needed.
Yes. The democrats have become the republicans. They’re the ones helping big business while trampling the middle class. They’re the ones who think Russia is about to conquer the world. The democrats of today are nothing like they were during the Clinton years.
“Paul Pelosi also bought TSLA calls on 2020-12-22 with an expiration of 3/18/22.
That was ahead of Biden’s push for energy tax credits. “
So there’s no concern of impropriety because those with insider information don’t know about planned policy announcements before they are made?
Becoming a congressperson is one of the surest ways to become a multi-millionaire in today’s America. It almost as fool-proof as GS and friends front-running announcements from the Fed.
There is trading on insider knowledge and there is trading on common knowledge. ‘Biden push for energy tax credits’ falls in the later for sure and only the former if you know very particular details that would benefit on particular firm.
That would be the point, that there would be particular details known by someone at the highest levels of government and privy to specifics that aren’t public knowledge. There is a history of intriguing stock activity concerning Nancy and Paul. An incomplete list includes back in 2012 ’60 Minutes’ was trying to ask questions, the Sun Edison purchase in 2014, the Visa IPO. These two persons are the rule, rather than the exception, as money and power tend to correlate and accumulate when one wins election to The District.
“Millionaire’s Club
Those in Congress who held assets above the median net worth of $1 million in 2012 also saw a hefty annual percentage increase.
Congressional millionaires had an average yearly percentage increase of 23.9 percent. “
Senators_and_Representatives(Personal_Gain_Index)
This stuff flies while they threw Martha Stewart in federal prison for a measly $40K.
Coinbase (coin) an IPO will start trading tomorrow. ( crypto currency broker) Anybody want to make a guess where that will open up. I think $400 to $500 a share.
Get serious about this in ALL cases.
Not just when the party member you oppose does it.
France 1789 and Russia 1919 could be a dress rehearsal for USA –? Income inequality cannot go on forever.
Enjoy the Hunger Games.
They. Don’t. Care. How It. Looks.
What are you going to do about it?
“The stock market purchase was made on March 19, 2021 ahead of the deal as reported.
The option purchase was made 2020-02-28 not 2021-02-28.”
All true. But also true is the options purchased on 2020-02-08 expired on ………. March 19,2021. So by far the most likely explanation for the stock purchase was the expiration of the options, not some insider trading.
She knew this was coming
Government moves really slowly..she knew this was coming
This story looks totally bogus. Pelosi bought call options in February 2020 with an expiration date of 3/19/2021. When the options expired they were in the money and she exercised her option to buy the stock. The actual trading was done over a year ago.
Roblox is doing a lot better than Microsoft.
Nancy Pelosi’s husband is NOT a member of congress.
You need a Lobotomy if you think using that argument equates to the fact that she doesn’t profit from the trade. They are married one hand washes the other, according to your statement.
….she must have revealed ‘secrets’ in their intimate and wrinkled togetherness, hahaha
Hold on. The call option was to buy in the $1xx range, but Microsoft is currently at $2xx? Sounds like that call option would have been bought in early 2019, latest. Or maybe I’m confused.
Pelosi herself Bought Microsoft Stock on March 19, ahead of the Microsoft Govt Deal
The lower the strike price of a call, the less leveraged the trade is. The closer the option is to expiration, the less the premium. My guess is Mr. Pelosi wanted a piece of the action, but had his money tied up in something else that had lower long term cap gains tax. Options allowed Mr P to take a position in MSFT and then figure out which investment to take the lowest cap gains tax on.
The problem is the fact that if you have money in America today you can make your sum grow substantially and if you don’t your shit out of luck.
Our current economic system and it’s financial laws are completely broken allowing for the complete economic inequality that is a reality today .
Reminiscent of her VISA IPO scandal. Nobody retires from Congress poor.
Of course there was insider information. It should be incumbent on the Pelosis to prove otherwise. It’s a blatant abuse of power, and it looks very bad, because it is very bad. Common behavior among members of congress, but bad, nevertheless.
It’s NOT legal anymore to do this btw, since the STOCK act was passed in 2012.
The Pelosis were very rich before Pelosi was elected to congress, though. Nancy also had a very long history of raising money for liberal Democrats long before she ever ran for Congress. Paul made his real money in San Francisco real estate.
That doesn’t mean they don’t take advantage of her insider knowledge. She should be censured, imho.
Nothing will happen.
The same thing that happened to Richard Burr and Kelly Loeffler should happen to Pelosi.
nothing happened to them until they lost in the next election.
Exactly. The same should happen to Pelosi. Should be noted that Burr is not seeking re-election, he was not voted out.
“Why are members of Congress allowed to trade stock while they are holding public office? “
Because royalty can do whatever they please.
i agree members of congress themselves should not be able to trade, or for that fact even hold any stocks in their name..they right laws that can affect profits..but this was her husband and is part of what he does for as job..If people dont like that they have to make politicians spouses give up their businesses and money too like presidents are “suppose” to
What! Why is Mish posting anti-demoncratic stuff? Mish is milquetoast left, right? He is meant to cancel Krystal & Saager, and on-send a weeping critique to a Corporate woke for their holier-than-thou cancelation.
What is it with this world?
I see innuendo. Was thid insider information? Otherwise I see yellow journalism
If you don’t think this is extremely bad looking AT BEST, you are crazy.
I mean, the guy chimes in with 4 comments on every one of your posts, and you could predict what will be in each by first calling the DNC and asking them what they think.
If he’s a human and not a partisan bot, it’d actually be kinda sad.
I think members of both houses of congress should not have personal trading accounts. if the gov’t thinks she acted illegally they ought to investigate. I see no evidence suggesting illegality. that’s my position
Doesn’t really matter if it’s innuendo. It’s legal for them do to it and EVERYONE (both sides) does it regularly. That’s the problem.
I see someone with political blinders on.
Non public material information, such as government contracts, is considered “insider information” by those in the investment industry, and it would be illegal to place trades based on it. There have been attempts to curtail congress’ cheating in the markets, such as the Stock Act, but to my recollection, as soon as the public stops noticing it, they just gut any reforms that have been passed.