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Nvidia Gains as Pelosi News Outweighs U.K. Antitrust Warning on ARM Deal

Stock MarketsAug 20, 2021 09:24AM ET
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© Reuters.

By Dhirendra Tripathi

Investing.com – Nvidia stock (NASDAQ:NVDA) was up more than 1% in Friday’s premarket trading after a disclosure that House Speaker Nancy Pelosi had bought stock and call options on the chipmaker.

Official disclosures show that Pelosi made the transactions, worth as much as $1.5 million, on July 23rd. The trading activities of Pelosi and her family have caught the eye before, most notably when her husband took a position in Slack stock before the software company agreed to be bought by Salesforce (NYSE:CRM).

Members of Congress routinely trade stock on their own account but are compelled to disclose major transactions.

The news, interpreted (without any substantiating evidence) by some as suggestive of the company enjoying a privileged relationship with lawmakers, outweighed less positive news released slightly earlier in the U.K., where the Competition and Markets Authority warned that its proposed $40 billion acquisition of chip designer ARM would have materially negative effects on competition.

According to reports, several chipmakers including Qualcomm (NASDAQ:QCOM), had objected to the deal, saying they would be disadvantaged by the deal.

The U.K.’s Competition and Markets Authority agreed and said it does not believe any form of behavioral remedy offered by the two companies would address its concerns.

Nvidia, with annual revenue of $16.68 billion, is a leading manufacturer of chips, particularly those used for graphics in computers and in graphics processing units used in data center servers.

ARM is a holder of multiple IP technologies that go into designing of chips. It primarily supplies IP relating to central processing units to semiconductor suppliers and systems-on-chip developers globally. Such suppliers, including Nvidia, use ARM's IP to produce semiconductor chips and related products for a variety of applications.

ARM estimates 70% of the world’s population engages with ARM-based technology.

ARM also has a joint venture, headquartered in Shanghai, with Chinese private equity firm Hopu Investments. Nvidia will need the approval of the authorities there and many experts don’t see that approval coming through either.

Nvidia had set an 18-month deadline last September while proposing the acquisition.

Nvidia Gains as Pelosi News Outweighs U.K. Antitrust Warning on ARM Deal
 

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Comments (7)
Tony Saldanha
Tony Saldanha Aug 20, 2021 2:21PM ET
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Acquisition of ARM can be a the boost ..I still belive NVDA Wil still lead data center n semi conductor industry even without soft bank deal
Eudon Hickey
Eudon Hickey Aug 20, 2021 12:32PM ET
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Most traders will go to jail. Lets see how equel people are
MK MK
MK MK Aug 20, 2021 12:21PM ET
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What the sheeps :)
Green Mango
Green Mango Aug 20, 2021 10:21AM ET
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"(without any substantiating evidence)" Right.  Any of us would be under SEC investigation.
Robert Sharp
Robert Sharp Aug 20, 2021 9:50AM ET
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How does the speaker of the house disclosing a stock she owns knowing it will make it go up strictly due to her position in the US government not appear to be a glaring conflict of interest? This is unethical on so many levels and not one mention of it in this Pretorian Guard produced article. Laws for thee and not for me. It's grotesque.
Tyler Phillis
Tyler Phillis Aug 20, 2021 9:50AM ET
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It is a conflict of interest, to answer your question directly. Conflicts of interest exist, and most are not illegal, but I agree that this one should be. “Government shall claim no right of ownership, nor shall it claim the right to influence private ownership rights.” We need new amendments to our law seperating state and economy.
Kaveh Sun
Kaveh Sun Aug 20, 2021 9:44AM ET
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99.9999% smart phones run on Arm chips. Arm designs chip but dont make it. They sell the blue prints to all. China laws allow only Chinese to operate inside China. Hence all western companies must set up JVs to meet China laws.
TL Chan
TL Chan Aug 20, 2021 9:44AM ET
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Are you kidding, Pelosi bought the stock is a positive news? Should be the opposite!
Kaveh Sun
Kaveh Sun Aug 20, 2021 9:44AM ET
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China is a big market but they cant afford not to have Arm. They r trying to use open cpu (risc-v) or Mips. Both of them are years behind arms.
 
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