There has been quite a bit of talk in recent weeks about the questionable timing of stock trades made by members of Congress after they got word, weeks before the markets tumbled, of the impending coronavirus pandemic that took a major hit on the global economy. Now, the spotlight is on House Speaker Nancy Pelosi (D-CA).
According to a recent report from Barron’s, Pelosi’s husband, Paul, made some choice stock purchases in late February that seem strategic, given the circumstances — even if they haven’t panned out quite as he may have hoped.
The dirty details
In mid- to late-February — right around the time that the market began its sharp downturn in response to the growing outbreak of COVID-19 in the United States — Paul Pelosi spent upwards of $3.3 million on stocks and options for two major tech firms, as well as one fairly new player in the tech industry that stood to benefit from Americans suddenly transitioning to working from home, Barron’s reported.
According to a regulatory filing dated April 1, Pelosi’s husband purchased stock options for Alphabet, the parent company of Google; Slack Technologies, which makes an app that allows co-workers to chat and communicate remotely; and Microsoft.
Barron’s scoured previous regulatory filings from the Pelosis and could find no prior investments in these companies.
Of those three, only Slack has shown year-to-date gains, Barron’s said, but all three have outperformed much of the rest of the S&P 500 amid the crisis, which has restaurants and other businesses shuttered across the country.
Alphabet, Microsoft, and Slack – oh my
According to Barron‘s, Paul Pelosi first purchased stock in Slack on Feb. 20. He purchased 10,000 shares, which were valued between $500,000 and $1 million.
The company’s shares are currently down around $2 from the price he purchased them at, Barron’s reports; however, the value of Slack shares are up more than 14% on the year. The S&P 500 Index, meanwhile, is down more than 22%.
Over the next several days, Mr. Pelosi then purchased stock options for Microsoft valued between $850,000 to $1.75 million, according to Barron‘s. Those options were purchased for a price between $130 and $140 per share, but are now trading for more than $150.
Finally, Paul Pelosi purchased 40 options for Alphabet at $1,200 each on Feb. 27. While those shares briefly inched above $1,300 per share amid the pandemic, they have since declined to around $1,110.
Interestingly, Barron’s noted that the Pelosis also purchased shares of Amazon and Facebook — two companies that stand to outperform the market in the current situation — in January. The details of those purchases weren’t made known, however.
Neither the speaker nor her husband responded to requests for comment from the outlet.
Questions and answers
To be sure, it is unclear if these purchases were made based on insider knowledge of what was to come, or if Paul Pelosi was simply attempting to play the dip in the market with an expectation that it would rebound quickly. But they aren’t the only ones under scrutiny, as Politico notes.
Maybe it’s time for some investigating on Capitol Hill. There are too many questions that still need answers.