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Ask any successful investor the key to his success, and the answer invariably involves an innate ability to allow the winning bets to run while cutting short the losing ones. In the case of Nancy Pelosi, however, even forced capitulation ends up on the winning side, as recently occurred with the US House Speaker’s bet on NVIDIA shares, thereby establishing the prominent politician as a veritable stock-picking guru.
5/21/21 - Purchased 200 LEAPS with an exp date of June 2022
7/23/21 - Purchased 5,000 shares at $195.58
7/23/21 - Purchased 50 LEAPS with an exp. date of Sept. 2022
6/17/22 - Purchased 20,000 shares at $100 (exercised 200 calls)
7/26/22 - Sold 25,000 shares at $165
— Nancy Pelosi Stock Tracker ♟ (@PelosiTracker_) July 27, 2022
Nancy Pelosi’s husband, Paul Pelosi, exercised 200 call options related to 20,000 NVIDIA shares in the run-up to the CHIPS Act approval. These options were purchased back in 2021 and carried an exercise price of $100. However, after a broad-based uproar, the Pelosis were forced to liquidate their NVIDIA bet at a loss of $341,365 (you can peruse the relevant Periodic Transaction Report here). The tweet above details the entire chronology of the House Speaker’s NVIDIA-related moves.
Breaking: The U.S. government has imposed a new license requirement, effective immediately, for any future exports of A100 and H11 integrated circuits to China and Russia, according to Reuters $NVDA
— Stock Talk Weekly (@stocktalkweekly) August 31, 2022
This brings us to the crux of the matter. The US government has now imposed a license requirement for the export of NVIDIA’s data-center-focused A100 and H11 GPUs to Russia and China. A similar licensing requirement has also been imposed on AMD related to the export of its MI250 GPUs.
This development has predictably hammered NVIDIA and AMD shares, with the former down nearly 6 percent in early pre-market trading while the latter is currently in the red by around 4 percent.
Remember when Pelosi sold 25,000 shares of $NVDA back in July?
The Pelosi's saved ~$600,000 of losses by selling their shares
— Nancy Pelosi Stock Tracker ♟ (@PelosiTracker_) August 31, 2022
The Pelosis had sold their NVIDIA stock holdings at a price of $165 per share. The stock is currently trading at $142.75, equating to a further decline of 13 percent (or roughly $600,000) from the level at which the Pelosis were forced to liquidate under public pressure. Consequently, the fortunate turn of events for the Pelosis continues.
After the Pelosi visit, China halted a CATL plant in the US, followed by a 100 GWh plant announcement in the EU.
Politicians are playing with fire.
— Marcel Münch (@_mm85) September 1, 2022
Meanwhile, the latest export licensing requirements on NVIDIA and AMD products are sure to attract a response from China. For instance, after Nancy Pelosi’s much-hyped visit to Taiwan, China forced CATL to abandon its plans to establish a 100 GWh battery plant in the US. We await China’s reaction now to these fast-paced developments.