Paul Pelosi cut losses on Nvidia in July amid intense scrutiny – and was able to avoid another 16% plunge ahead of US sanctions on chip sales

Paul Pelosi cut losses on Nvidia in July amid intense scrutiny – and was able to avoid another 16% plunge ahead of US sanctions on chip sales

If Keith Gill and wallstreetbets are names that excite you in the investment world, there’s one more you might want to add to your watch list: Nancy Pelosi.

Pelosi is one of the most prominent figures in US politics, currently serving as Speaker of the House. But the 82-year-old – along with her venture capitalist husband Paul who does most of the trading – also loves to dabble in the stock market.

Of course, even politicians don’t have a 100% win rate.

A public disclosure in July showed that Paul Pelosi sold his stock in microchip giant Nvidia for a significant six-figure loss. The sale came amid intense scrutiny over Paul’s purchase of Nvidia just before a vote on a $52 billion chip subsidy.

That said, recent developments suggest that Paul Pelosi’s sale of Nvidia has worked out wonderfully in his favor.

Here’s a closer look at the trade — and another Pelosi move that likely resulted in a seven-figure profit.

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Nvidia (NVDA)

As a leading graphics card designer, Nvidia stock has had a solid run over the past decade. But that rally came to a screeching halt towards the end of 2021. In 2022, the stock fell more than 50%.

Nvidia’s plunge is significant even compared to other falling stocks in the semiconductor sector.

On June 17th, Paul Pelosi exercised 200 Nvidia warrants (which expired on June 17th) at an exercise price of $100, worth between $1 million and $5 million.

Then on July 26, Paul Pelosi sold 25,000 Nvidia shares at an average price of $165.05. According to a public disclosure, the transaction resulted in a “total loss of $341,365.”

But cutting your losses as a trader isn’t a bad thing if that investment continues to decline — and that’s exactly what’s happening with Nvidia stock.

On Thursday, the US government placed new restrictions on the sale of sophisticated chips — like those sold by Nvidia — to China and Russia. Nvidia fell 7.7% in response to the news.

Nvidia is now down about 16% since Paul Pelosi’s July 26 sale.

Visa (V)

The first disclosure also shows that Paul Pelosi sold 10,000 Visa shares on June 21 worth between $1 million and $5 million.

Pelo is no stranger to the credit card giant. In 2011, it was reported that they participated in Visa’s initial public offering in 2008. Back then, the power couple was able to purchase 5,000 shares of Visa at the IPO price of $44.

Visa conducted a four-for-one stock split in March 2015, so the IPO price on a split-adjusted basis was $11.

Now, Visa shares were trading between $193.73 and $196.73 on June 21. If Paul had sold the 10,000 shares at the day’s low of $193.73, he would have received $1,937,300 from the trade.

If these were the shares purchased at the company’s IPO, their cost basis would have been $110,000 (10,000 shares times $11 per share) and the pair would have made a whopping profit of $1,827,300.

So far in 2022, Visa shares are down about 9.6% — not a great performance, but still better than the S&P 500’s 17.3% decline over the same period.

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This article provides information only and should not be construed as advice. Provided without warranty of any kind.

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