Former Speaker of the House Nancy Pelosi recently disclosed a new tech stock purchase and the buy was made at a huge discount to what retail investors have been paying. Here's how.
What Happened: Similar to a huge stake in NVIDIA Corporation (NASDAQ:NVDA), Nancy Pelosi and her husband Paul Pelosi now have a sizable stock stake in Broadcom Inc (NASDAQ:AVGO).
Broadcom Inc. is one of the largest semiconductor companies in the world, and like Nvidia, is benefiting from the surge in demand for AI chips and networking solutions.
Pelosi's latest disclosure shows that her husband exercised 200 call options for 20,000 Broadcom shares on June 20 with a strike price of $80.
The options had an expiration date of Jun 20, 2025 and were originally purchased by the Pelosis back on June 24, 2024.
Based on a current share price of $273.15, the Pelosis just bought their Broadcom stock at a 71% discount to the market value with the $80 strike price. The Pelosis received a discount of approximately 68% on June 20 when exercising the options.
Pelosi previously disclosed buying 20 call options with an $800 strike price and June 20, 2025 expiration in June 2024. A ten-for-one stock split changed the number of options and strike price.
Along with disclosing the Broadcom trade, the Pelosis also disclosed a rare losing trade. The filing said the Pelosis sold 2,822 units of the Matthews International Fund. The comments section stated that the sale was conducted at a loss of $28,948. The sale could have been done for tax purposes to offset capital gains.
Did You Know?
- Congress Is Making Huge Investments. Get Tips On What They Bought And Sold With Our Easy-to-Use Tool
Why It's Important: The latest Broadcom stock purchase highlights a common practice by Paul Pelosi. The venture capitalist likes to buy call options in large-cap technology stocks.
The options bought are typically in-the-money LEAPS, which means the strike price is below the current market price and have an expiration date of more than one year from the current date.
Past disclosures have shown that the Pelosis typically hold the call options until the expiration date when a decision is made to either sell the options or exercise the options and buy a stock stake at the strike price.
With the latest disclosure, Broadcom has now become a top holding for the Pelosis alongside Nvidia.
Nancy Pelosi says she does not share information on congressional activities with her husband. Observers remain skeptical, given the questionable timing of her disclosed trades.
Pelosi’s annual salary falls between $174,000 and $197,000 as a senior member of Congress. When she served as Speaker of the House, her annual salary was $223,500.
An ETF to track the stock trading activity of Democrats in Congress, the Unusual Whales Subversive Democratic Trading ETF (BATS:NANC), bears the Representative’s name in the stock ticker.
Increased calls to ban Congress members and their spouses from trading have also centered on Pelosi, a Democrat. One bill even uses her name as an acronym: the PELOSI Act.
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