Nancy Pelosi Sold Visa, Here’s Why

Hint.. It always has to do with Politics

I was scratching my head when I saw the filing that Nancy Pelosi dumped her shares of global payment conglomerate Visa (V). I followed the name for years as a research analyst on Wall Street. Visa controls the global payment market with an envious and almost non-disruptive moat. Operating margins are over 65% and the stock has compounded at a high double-digit rate over the past decade. 

Even better, Visa recently reported that payment transactions are through the roof. Compared to 2019, payment volumes in the United States are up 147%. More payment volumes equal more dollars for Visa investors which equal a higher share price. 

So, when I saw that legendary hedge fund trader, Nancy Pelosi, sold her stake in Visa I was pretty confused. Why trigger capital gains to dump your stake in Visa when the company is firing on all cylinders? The only thing I could think of is that Pelosi is nervous on the economy crashing and is moving towards cash. But why sell Visa out of anything else. During a recession Visa outperforms as more people resort to taking on credit card debt to pay for their everyday living expenses. Visa was a true beneficiary during the Great Recession and handsomely outperformed to make their investors a ton of money. 

But I dug deeper into the credit card industry. Then it hit me like a ton of bricks. A new proposed bill that would thwart the global credit card industry. If passed, the duopoly controlled by Visa and Mastercard would forever be disbanded. Profits evaporated in the dust.