Nancy Pelosi has plowed up to $1 million into bullish bets on Tesla stock
REUTERS/Yuri Gripas
- House Speaker Nancy Pelosi has up to $1 million riding on Tesla's future success.
- The politician bought 25 call options on shares in Elon Musk's electric-vehicle company.
- Pelosi also made bullish wagers on Apple and Disney, and purchased AllianceBernstein stock.
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House Speaker Nancy Pelosi has placed up to $1 million worth of bullish bets on Tesla stock, she revealed in a financial disclosure form last week.
Pelosi bought 25 call options on Tesla stock with a strike price of $500 and an expiration date of March 18, 2022. She -or more likely her husband, Paul Pelosi, who runs an investment firm - spent between $500,001 and $1 million on the purchases on December 22, 2020.
The call options give Pelosi the right to buy 2,500 Tesla shares at $500 each at any point before they expire in March 2022.
That may sound like a fantastic deal with shares in Elon Musk's electric-vehicle company changing hands at about $850 today. However, Pelosi will have paid a premium for the options, so Tesla stock will have to climb higher before they become profitable to exercise.
Pelosi likely opted to buy long-term equity anticipation security (LEAP) options as they cost less upfront than buying Tesla shares directly, while also granting exposure to a stock that skyrocketed about 700% last year. The $500 strike price means the options are "in the money" and won't be worthless even if Tesla's stock price treads water or falls by a few hundred dollars by the time they expire.
The purchases have raised eyebrows despite being legal. Pelosi now has a financial interest in Tesla's success, even as she's poised to play a key role in passing the Biden administration's green initiatives, which stand to help the automaker.
The veteran politician also spent up to $500,000 for 100 call options on Apple stock, with a strike price of $100 and an expiration date of January 21, 2022. Moreover, she plowed as much as $1 million into 100 call options on Disney stock, which have a strike price of $100 and a March 18, 2022 expiry date.
Finally, Pelosi paid between $500,000 and $1 million for 20,000 shares in AllianceBernstein. She listed a total of $1.75 million to $3.5 million in security purchases on her disclosure form.
Pelosi has represented California in the House of Representatives since 1987, and as speaker stands second in the line of succession to the presidency after the vice-president. She was the highest-ranking female elected official in US history until Kamala Harris was inaugurated as vice-president earlier this month.
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