Speaker of the House Nancy Pelosi made headlines this week with a highly scruntinized visit to Taiwan, a move that led to crisis control from the White House and affect relations between China and the U.S. going forward.
The visit to Taiwan could also have a large impact on the semiconductor business, which has a heavy presence in China and Taiwan. Coincidentally, it could also help an investment held by Pelosi and her husband, venture capitalist Paul Pelosi.
Pelosi met Taiwan President Tsai Ing-wen during a lunch event, as well as Mark Liu, Chairman of Taiwan Semiconductor TSM, a company with a market capitalization of more than $430 billion. There were also other semiconductor industry representatives at the gathering, a TSMC spokesperson told Benzinga.
The recently passed CHIPS Act provides funding to the semiconductor sector and encourages the building of foundries in the U.S. and Taiwan Semiconductor is building a $12-billion plant in Arizona.
Pelosi, who has said the CHIPS Act could create an opportunity for U.S. cooperation with Taiwan, recently came under scrutiny for her husband exercising call options of NVIDIA Corp NVDA ahead of the CHIPS Act approval.
The Pelosis eventually sold their shares in NVIDIA.
As the public questions the reason for Pelosi's trip to Taiwan, given the amplified tensions with China, it is worth pointing out there might be an investment angle.
Why It’s Important: The Pelosis do not own any shares of Taiwan Semiconductor directly, but they do own a large stake in Alliance Bernstein Holding AB, an asset management and investment firm that has a large stake in the semiconductor company, according to UnusualWhales.
AllianceBernstein holds about 1.47 million shares of Taiwan Semiconductor. The value of that stake was about $153 million at the end of June.
Purchases of AllianBernstein by Paul Pelosi date back to 2020 with three purchases filed:
- Dec. 22, 2020: 20,000 shares of AB at around $34 a share, valued at $500,000 to $1 million
- Feb. 18, 2021: 15,000 shares of AB at around $36 a share, valued at $500,000 to $1 million
- Feb. 23, 2021: 25,000 shares of AB at around $36 a share, valued at $500,000 to $1 million.
The three purchases give the Pelosis a stake of 60,000 shares of AllianceBernstein, currently valued at $2.7 million.
Benzinga recently reported that a bill could be coming in August for Congress to vote on in regards to banning trading by public officials.
The Pelosis reported a loss of $341,365 on the NVIDIDA shares, putting the filing through in one day.
“I think this comes in response to public pressure and the conflict of interest her stock position posed,” the founder of Congresstrading.com told Benzinga.
The trade of NVIDIA could be labeled as insider trading if her husband got knowledge of the progress of the CHIPS Act prior to the transaction.
Nancy Pelosi told reporters when recently asked that her husband gets no information from her before any of his trades are made.
The Nancy Pelosi Tracker on Twitter, which shares transactions by the House Speaker, notes the Pelosis still own 50 options on NVIDIA Corporation with a strike price of $100 and expiration of Sep. 16, 2022 that were purchased back on July 23, 2021.
While NVIDIA shares were sold at a loss, the Pelosis could stand to benefit from the CHIPS Act with NVIDIA a potential winner and the indirect stake in Taiwan Semiconductor potentially getting a boost from the legislation and the visit by Pelosi to the island nation.
TSM, AB Price Action: Taiwan Semiconductor shares are down 0.4% to $85.70 on Wednesday.
AllianceBernstein shares are up 2% to $44.88 on Wednesday.
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