Politicians Trading Amidst Market Frenzy: A Tale of Double Standards

Hello,

below a summary of relevant events happened in the stock market in the last week

📈 1/ Stocks and sectors bought by US politicians last week

This week, the trading activity at Capitol Hill was limited, with 38 transactions taking place

Consumer Staples & Electrical Equipment were the most invested sectors

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🏦 2/ US Politicians potential insider trading: Sporadic Congress Trader Adds Nvidia To Stock Portfolio

In a week with scant trading from Congress, one member was already reaping profits thanks to the mile-high success of AI giant, NVIDIA Corp. On May 22, Rep. Stephen Lynch purchased NVIDIA Corp (NVDA:US) shares at a stock price of $949.5. With its constant rise, NVDA shares rose by +20.93% since the Congressman’s purchase

Rep. Lynch serves on the Committee on Financial Services, the Committee on Oversight and Accountability and several Caucuses on various issues. An infrequent trader, his other 2024 disclosure was of VMware Inc (VMW:US)’s shares. He sold VMW stock around the same time the company was acquired by Broadcom Inc in Nov 2023.

NVIDIA Corp was once a $360 billion market cap company. Thanks to OpenAI and its chatbot, ChatGPT, the possibilities of AI were opened to the world and market investors. Nvidia's high-quality chips thus became a pecking ground for tech businesses and giants worldwide, turning the company into what it is today: a $2.6 trillion market value company.

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How to be notified when politicians buy / sell stocks

As seen before, some suspicious trades were made by Congress Members and their relatives

However, the GOOD NEWS is that their moves can be copied (politicians need to disclose their stock positions)

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📄 3/ Interesting stock market stories

STORY #1:  Elon Musk Redirects Nvidia AI Chips from Tesla to X and xAI

Elon Musk has directed Nvidia to prioritize AI chip shipments originally intended for Tesla to his other ventures, X (formerly Twitter) and xAI, raising concerns among Tesla shareholders about his commitment to the company. This move comes ahead of a crucial vote on Musk's compensation package.

A memo from Nvidia disclosed that Musk redirected 12,000 GPUs meant for Tesla to X, delaying Tesla's receipt of over $500 million in processors by several months. Musk explained that Tesla currently lacks the storage capacity for these processors and is expanding its Texas Gigafactory to accommodate them.

Earlier this year, Musk announced that Tesla would increase its use of Nvidia's advanced chips, planning to invest $10 billion in AI for enhancing its full self-driving software and robotics. Simultaneously, Musk is advancing AI projects at X and xAI, which recently raised $6 billion in funding.

Tesla shareholders are scheduled to vote on June 13 on Musk's pay package, the largest for any CEO in corporate America. Musk has previously expressed discomfort with expanding Tesla’s AI leadership without having substantial voting control.

The recent EV market slowdown and layoffs at Tesla have added to the uncertainty about the company's future. Despite this, both Tesla and Nvidia have declined to comment on the situation. Additionally, various lawmakers have made stock transactions involving Tesla and Nvidia, reflecting mixed levels of confidence in these companies.

Concurrently, numerous lawmakers have executed multiple stock transactions in both Tesla and Nvidia, showing variations in trust levels. Where Rep. Stephen Lynch and Rep. Josh Gottheimer were buying stocks, Rep. Pete Sessions and Rep. Ro Khanna were seen on the selling side.

If you want to be notified when insiders trade stock, we send daily email alerts here 

STORY #2: Politicians Trading Amidst Market Frenzy: A Tale of Double Standards

In the whirlwind world of stock trading, few stories capture the public imagination like that of Keith Gill, better known as "Roaring Kitty" on social media. Gill's involvement in the 2021 GameStop stock frenzy turned him into a financial folk hero among retail investors. However, recent probes into his trading activities have reignited debates on market manipulation and the glaring double standards between the actions of private citizens and those of politicians.

Gill's initial investment in GameStop reportedly ballooned into millions as retail traders, inspired by his posts, drove the stock price to unprecedented heights. His recent return to social media and a $116 million bet on GameStop caused the stock to surge over 100% in a single day, drawing scrutiny from regulators.

Massachusetts Secretary of State Bill Galvin has initiated an investigation into Gill's recent trading activities. This follows previous probes that concluded with a settlement against his former employer, MassMutual, for inadequate supervision. The current investigation seeks to determine if Gill's actions constitute market manipulation.

Simultaneously, E*Trade is considering banning Gill from its platform over concerns about his influence on the stock market. The Securities and Exchange Commission (SEC) is also reportedly examining options trades around the time of Gill’s social media posts.

While Gill faces intense scrutiny, similar actions by politicians often go unchallenged. U.S. Senator Tommy Tuberville's recent trade in Humacyte Inc. is a prime example. Tuberville, who sits on the Armed Services Committee, traded Humacyte stock shortly before it surged 220%. His position raises questions about insider knowledge and conflict of interest.

Nancy Pelosi, a prominent figure in Congress, has also faced public accusations of suspicious trading. Pelosi's net worth, heavily influenced by stock trading, has grown significantly. Her trades, often executed by her husband, have sparked debates about the ethical implications of politicians engaging in stock market activities while possessing privileged information.

The contrasting reactions to Gill’s and politicians’ trading activities highlight a systemic issue. While regulators swiftly act against retail investors like Gill, politicians often escape similar scrutiny despite having access to non-public, potentially market-moving information. This double standard underscores a need for stringent regulations and transparency to ensure a level playing field.

If you want to be notified when politicians trade stock, we send daily email alerts here 

STORY #3:  A Summary of the Main Trades Placed by Politicians and Insiders this Week

• Rep. Susie Lee buys stock in German arms manufacturer Rheinmetall ($RNMBY), becoming the first U.S. politician to do so. Lee sits on the House Appropriations Subcommittee on Military Construction.

• Last month, we posted a report on a suspicious purchase of Humacyte ($HUMA), stock by Senator Tommy Tuberville. The stock has now risen 158% since then.

• Rep. Thomas Kean Jr. just disclosed a purchase of Illumina stock, ($ILMN). Illumina is a DNA sequencing company & Kean sits on the House Committee on Science, Space, and Technology.

• Nvidia (NVDA) stock has now risen 133% since Rep. Nancy Pelosi bought up to $5M of call options. We estimate that Pelosi has made $8.4M in the stock market this month ($245M Net Worth).

• In November, we posted a report on a suspicious purchase of Artivion ($AORT) stock by Senator Tina Smith. The stock has now risen 76% since then.

If you want to be notified when politicians trade stock, we send daily email alerts here 

📄 4/ Political Trading Bot

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This means that every time politicians buy sizable amount of stocks, the bot buys those stocks as well

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