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Pelosi banks $1.4M in 90 days from Nvidia stock option trade, outraging watchers

Published 26/02/2024, 23:00
Updated 26/02/2024, 23:00
© Reuters

Late last year, U.S. Representative Nancy Pelosi reported a transaction to purchase call options in NVIDIA Corporation (NASDAQ:NVDA). After a massive rally in the stock this year related to breathtaking AI uptake and the company's strong financial results, Pelosi is now said to be sitting on a significant windfall profit.

Nancy Pelosi Nvidia Call Options Trade

According to historical options data, Pelosi paid an estimated $380 per option contract in late November when she bought 50 December 20, 2024, 120 call options. Each option contract represents 100 shares of the underlying stock.

Those same options are now worth about $660 per option contract, suggesting an estimated gain of $1.4 million. When Pelosi made the trade known publicly in late December, it was disclosed she paid between $1 million and $5 million for the options.

Speaking to Investing.com, Chris Josephs, co-founder of Autopilot, a service that automates your portfolio by copying top-notch traders in real-time, explained that the NVDA buy "was one of the larger ranges."

Joseph, who also runs the @PelosiTracker_ account on X (formerly Twitter), added that the option buy occurred on November 22, 2023. The stock is up 63% since then.

"From an ethical perspective, I believe it is extremely harmful for politicians to trade individual stocks," argues Joseph. "There are numerous jobs out there that don't allow employees from trading, yet our most powerful [A]mericans can."

"It creates distrust in society which inevitably erodes the longer-term trust in our institutions," he adds. "They shouldn't be allowed to do it. We started Autopilot as the first way to automatically copy their trades as a way to bring more awareness to the cause."

Elsewhere, Josephs stated there are "numerous other politicians who own Nvidia, including Markwayne Mullin (R), David Kustoff (R), Mike Mccaul (R), Josh Gottheimer (D), & more."

He highlighted that Senator Mullin purchased $30,000 of Badger Meter Inc (NYSE:BMI), a producer of automated water meter technology. Joseph, via the @PelosiTracker_ account, noted that the EPA recently passed a mandatory requirement for utilities to upgrade to newer water-automated systems and that "Mullin just so happens to sit on the Environmental Services Senate Committee."

Josephs told Investing.com that "a lot of it comes across as sketchy, mainly because the politicians sit on committees that oversee these things."

While he notes that stock trades taken by politicians are not usually market-moving, he revealed that today, Pelosi disclosed a new buy into the cyber security firm Palo Alto Networks Inc (NASDAQ:PANW), which rose as much as 10% before ending the session up 7%.

"I've never seen this happen the same day as a disclose so maybe more people are catching on and paying attention," he states.

A public disclosure showed that Pelosi bought 70 call options on Palo Alto Networks with a $200 strike price and expiry on 01/17/25. 50 were bought on 02/12/24 and 20 were bought on 02/21/24. Pelosi is estimated to have paid about $1.1 million for the position.

Nancy Pelosi Salary

According to Forbes, U.S. representatives and senators are given a lifetime pension and a taxpayer-matched savings plan with contributions of up to 5% of salary. They are also entitled to receive Social Security benefits.

Pelosi was once the most highly compensated member of Congress. Her annual salary was reportedly $223,500. This suggests she made more than six times her annual salary from this one NVDA option trade.

Nancy Pelosi's Stock Portfolio

Joseph further states that Pelosi also has other investments in artificial intelligence and big tech stocks, including her top two positions of Microsoft Corporation (NASDAQ:MSFT) and Apple Inc (NASDAQ:AAPL), although they couldn't identify how large her total portfolio is. Nevertheless, the year-to-date performance is up 12%, according to Josephs.

Nvidia Stock Price

Over the past 12 months, Nvidia shares have rallied significantly, climbing more than 240%. They touched an intraday high of over $823 per share on Friday.

So far this year, the stock is up almost 61% after closing Monday's session around the $791.20 per share mark. Its current market capitalization is $1.98 trillion.

Last week, Rosenblatt lifted its price target for Nvidia to a new Street high of $1,400 from $1,100, reiterating a Buy rating. The firm said Nvidia "smashed" its consensus estimates for quarterly earnings, as "the shift to accelerated compute away from general compute is reaching a tipping point, and a disruptive new app, generative AI, is creating a whole new industry.”

Nancy Pelosi's office has not responded to a request from Investing.com to comment on the Nvidia stock option trade at the time of this publication.

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