Michael Burry, who bet on the collapse of subprime credit, does not hesitate to give his opinion on market developments.
The Covid-19 pandemic has caused significant disruptions to business supply chains around the world. These upheavals, which affect virtually all economic sectors, have particularly impacted semiconductor manufacturers. Their chips power most of the hardware we use, from telephones to computers and cars.
Automakers found themselves forced to temporarily close factories, while some models could not be completed. As a result, the prices of many products have skyrocketed. This supply chain crisis has shone the spotlight on semiconductors, which have become an important strategic issue.
Speaker Pelosi’s Husband Buys Nvidia amid Chipmaker Talks
In Washington, Congress is assessing a legislation that would provide $52 billion in government subsidies to companies that produce semiconductors. The Creating Helpful Incentives for the Production of Semiconductors for America Act (CHIPS) is intended to reduce U.S. reliance on foreign-made semiconductors.
The bill wants to provide grants, tax credits and other incentives to companies to manufacture semiconductors in the United States.
But it is in this context that we learned that the husband of Nancy Pelosi, the speaker of the House, recently acquired shares in chipmaker and high-end graphics processing units (GPUs) Nvidia.
Paul Pelosi exercised 200 call options on shares of NVIDIA (NVDA) – Get NVIDIA Corporation Report worth between $1 million and $5 million, according to a recent disclosure filed by Nancy Pelosi with the House of Representatives. Basically, Paul Pelosi acquired between 1 million and 5 million Nvidia shares on June 17, according to these documents which you can see here.
Paul Pelosi also sold 50 call options in Apple (AAPL) – Get Apple Inc. Report valued between $100,000 and $250,000 on June 17, and sold 10,000 shares of Visa (V) – Get Visa Inc. Report worth between $1 million and $5 million on June 21.
Paul Pelosi, 82, a successful San Francisco-based financier and businessman, runs his venture capital firm, Financial Leasing Services.
If Nvidia, which designs its own chips but has them manufactured by other companies, will not directly benefit from the aid under discussion in Congress, Pelosi’s investment has however revived the debate on the conflicts of interest between lawmakers and investments in publicly traded companies.
‘She Knew This Was Coming’
Michael Burry, the notorious hedgefunder, finds the Pelosi’s situation disturbing and troubling. He has just pointed that out.
“So @SpeakerPelosi made a bundle on semiconductor stocks bought recently,” Burry wrote on Twitter. “Because she knew this was coming. Should be illegal.”
Burry, as often happens, deleted the tweet but it could still be seen on the platform.
Burry, who runs Scion Asset Management, will always be remembered as the man who predicted the collapse of the housing bubble, and also as the person who said the mortgage market was a huge and unsustainable house of cards. He bet against the subprimes and won big.
The controversy created by the situation of the Pelosi couple is a ball and chain that follows the speaker, who was asked about it by reporters on July 21. She rejected the idea of her husband making trades based on information she gives him.
“No, absolutely not,” Pelosi said at a press conference.
The question was: “Has your husband ever made a stock purchase or sale based on information received from you?”
A few days earlier, her spokesperson Drew Hammill had given a statement to Fox Business about the stock purchase by her husband Paul.
“The Speaker does not own any stocks,” Hammill said. “As you can see from the required disclosures, with which the Speaker fully cooperates, these transactions are marked ‘SP’ for Spouse. The Speaker has no prior knowledge or subsequent involvement in any transactions.”
Nancy Pelosi caused a stir in 2021 when she opposed a potential ban on trading individual securities for members of Congress and their families. “We are a free-market economy. They should be able to participate in that,” Pelosi said at the time.
She changed her mind after criticism from the public and her colleagues. “If members want to do that [ban], I’m okay with that,” she said later on.
There hasn’t been much progress towards a potential ban yet.