Nancy Pelosi's Husband Buys Microsoft Ahead of Big Govt Contract

Mish

Nancy Pelosi's husband made an excellent Microsoft stock market trade. Let's check out the details.

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

Current Members of US Congress by 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

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

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

Comments (50)
No. 1-31
Sechel
Sechel

I see innuendo. Was thid insider information? Otherwise I see yellow journalism

Jojo
Jojo

"Why are members of Congress allowed to trade stock while they are holding public office? "

Because royalty can do whatever they please.

Mr. Purple
Mr. Purple

The same thing that happened to Richard Burr and Kelly Loeffler should happen to Pelosi.

Eddie_T
Eddie_T

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.

Gorby
Gorby

Reminiscent of her VISA IPO scandal. Nobody retires from Congress poor.

Quanta
Quanta

It is extremely suspicious given that this was done through call options, and not regular stock. In other words, precise timing. As much as I like some of the things that Pelosi does in Congress, I think this is a clear example of insider trading.

Felix_Mish
Felix_Mish

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.

3 Replies

Mish
Mish

Editor

Pelosi herself Bought Microsoft Stock on March 19, ahead of the Microsoft Govt Deal

Six000mileyear
Six000mileyear

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.

7towers
7towers

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 .

shamrock
shamrock

Nancy Pelosi's husband is NOT a member of congress.

shamrock
shamrock

Roblox is doing a lot better than Microsoft.

shamrock
shamrock

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.

shamrock
shamrock

"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.

Bam_Man
Bam_Man

They. Don't. Care. How It. Looks.
What are you going to do about it?

Bam_Man
Bam_Man

Enjoy the Hunger Games.

simb555
simb555

France 1789 and Russia 1919 could be a dress rehearsal for USA --? Income inequality cannot go on forever.

PecuniaNonOlet
PecuniaNonOlet

It is all corrupt all the time, every nook and cranny of the US system from education to government to business now relies on deceive and fleece model and it happens because its citizens dont demand better, just score one for the red or blue team and we will look the other way.

I get the sense there is less corruption now in third world countries than the US.

njbr
njbr

Get serious about this in ALL cases.

Not just when the party member you oppose does it.

Steve_R
Steve_R

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.

Tengen
Tengen

This stuff flies while they threw Martha Stewart in federal prison for a measly $40K.

Call_me_Al
Call_me_Al

"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.

Dutoit
Dutoit

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.

FromBrussels
FromBrussels

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 !

KidHorn
KidHorn

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.

ohno
ohno

And now the old hag wants my guns as well.

PostCambrian
PostCambrian

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.

LawrenceBird
LawrenceBird

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).

FedUp in Ohio
FedUp in Ohio

Queen Nancy was quoted as saying “let them eat cake!”

Whyaretheyasking
Whyaretheyasking

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?

ENEMY OF POLITICIANS
ENEMY OF POLITICIANS

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.

Koyabi
Koyabi

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....

kavyaarora
kavyaarora

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kavyaarora
kavyaarora

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