The returns that members of the United States Congress make on their stock investments are, on average, much more impressive than that of their constituents. Understandably, the practice is controversial.
While it is regulated, relatively weak limitations are in place — and disclosure rules obscure the exact amounts being invested.
There is an ongoing debate as to what extent congressional stock trading should be allowed. Politicians, and legislators in particular, have an informational edge owing to the classified information they are privy to, as well as their first hand knowledge regarding the intentions and goings on of Congress.
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In a blatant display of conflict of interest, politicians often use that information to conduct suspicious trades — more often than not, ahead of key events that go on to serve as catalysts for bullish price action.
Debbie Wasserman Schultz, former Democratic National Committee (DNC) chair and current representative for Florida’s 25th congressional district, is widely regarded as the most successful congressional trader of 2022.
The controversial lawmaker, who resigned from the DNC due to allegations of bias, recently invested in a company that directly benefited from government contracts — what’s worse, her committee assignments in Congress all but guarantee advance knowledge of those contracts.
Wasserman Schultz’s Viasat investment seems to have paid off
On November 20, the congresswoman invested between $1,001 and $15,000 in Viasat (NASDAQ: VSAT) stock, per data retrieved by Finbold’s congressional trading radar. At the time, VSAT stock was trading at $6.93.
Since then, it has seen prices surge by as much as 45% to reach a high of $10.06 — although they had retreated back to $8.87 at the time of publication, equating to a 27.99% increase in just a little over two weeks.
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The timing of the trade is certainly suspicious — VSAT stock is currently down 68.83% on a year-to-date (YTD) basis, owing primarily to a string of disappointing earnings reports. Assuming her trades were at the lower end of the reporting range, a $1,000 investment would now be worth $1,262, while at the upper end of the range, at $15,000, her position would have grown in value to $18,916.
So, what were the bullish catalysts in question? In the preceding month of September, Viasat was awarded a total of $186.6 million through two military contracts — one for network services, and one for satellite communications.
These contracts were announced before Wasserman Schultz’s purchase — as a member of the Subcommittee on Military Construction, she is well positioned to know exactly how much Viasat stock stands to benefit — as well as if similar deals are in the cards for the telecommunications company going forward.
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