This week, reports emerged of US Representative Nancy Pelosi returning to stock trading following her successful options trade involving Nvidia (NASDAQ: NVDA) stock that earned her a hefty profit of more than $2 million.
This time, the focus shifted to Palo Alto Networks (NASDAQ: PANW), drawing the interest of other US politicians as well.
Namely, between 2020 and six months ago, only one member of Congress had purchased stock in Palo Alto Networks. However, in the past six months, the number has skyrocketed to seven members of Congress investing in the company.
Picks for you
This group includes prominent Congressional traders like Nancy Pelosi, Josh Gottheimer, Markwayne Mullin, and Michael Burgess.
What attracted US politicians to PANW stock?
While the concrete reason was left to speculation for a couple of days, the argument behind the PANW stock purchase by US politicians soon revealed itself.
A cyberattack targeting a unit associated with UnitedHealth Group (NYSE: UNH), the largest insurer in the US, has caused disruptions in drug prescription orders at thousands of pharmacies for approximately a week.
The attack occurred on Change Healthcare, a division of United’s Optum, and was detected on February 21.
On February 27, it was revealed that Palo Alto Networks had been chosen to investigate the cyberattack on UnitedHealth Group. Interestingly, on that same day, February 21, Nancy Pelosi made her second purchase of PANW stock call options. These purchases amounted to approximately $1,096,000, with a strike price of $200 and an expiration date set for January 17, 2025.
PANW stock price chart
As of the market close on February 28, PANW stock price was trading at $316.15, reflecting a modest 0.44% increase during this period. However, PANW shares surged 14.72% over the past five trading sessions.
However, since Pelosi’s initial purchase of PANW stock on February 12, its price has experienced a retracement by -15%.
More notably, since Pelosi’s second purchase, PANW has experienced a remarkable increase of over 20%.
It seems that Nancy Pelosi’s first purchase was based on an earnings play, while the second buy was more of a “Buy the dip” strategy.
The initial buy, totaling approximately $1 million on February 12, likely reflected anticipation around earnings. Subsequently, on February 21, Pelosi made a second purchase of around $250,000, potentially capitalizing on a price decline.
Buy stocks now with eToro – trusted and advanced investment platform
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
