Clover Health, a digital health company, gained 9.64% on Monday ending the session at $9.67 as investors debated both the fundamentals in the company–as well as whether CLOV is caught in a so-called “short-squeeze.”
The company has caught the attention of Reddit traders who are buying up the stock, causing its ticker (CLOV) to trend as online traders look for their next “hot” company to follow GameStop.
Clover Health first made headlines in February when Hindenburg Research accused the SPAC (backed by Chamath Palihapitiya) of using misleading marketing practices and allegedly failing to disclose a federal investigation. The company said at the time that it had received a notice from the SEC and intended to fully cooperate. But, it also pushed back against much of Hindenburg’s report, saying some claims were “completely untrue.”
Short Interest Peaks Online Trading InterestÂ
Then, reports surfaced that the company has a high percentage of short interest in its float — which triggered the interest of day traders on Reddit and WallStreetBets.
Looking for a “short-squeeze” to rival GameStop, investors poured into the stock.
In Monday trading, options traders bet big on the stock, helping to send shares up almost 10% on the day.
Bank of America is still maintaining its $15 price target on CLOV in part because the bank  likes the company’s new direct contracting program for Medicare and Medicaid Services.
Reddit Stock Mania
Elsewhere in “Reddit stocks,” GameStop continued  to rally on news of the executive team’s resignation. The CEO, George Sherman, announced on Monday plans to step down. This follows news earlier in the year that the CFO, Jim Bell, would step down. The company is in the midst of a shift from a brick and mortar retailer to an online gaming company. Also helping to lift the stock in Monday’s session, ‘Roaring Kitty’ (aka Keith Gill) announced he was doubling down on his investment.
Shares of GameStop jumped more than 6% to close at $164.37. Not quite the $483 from January, but not too shabby. The stock is still up nearly a 800% this year.
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