Shares of Clover Health Investments, Corp. (CLOV) breached their previous 52-week high of $24.93 in pre-market Wednesday morning. This added to a total increase in the stock’s value of over 110% in the past week amid a Reddit push to short the stock. Following market open, its price fell just below Tuesday’s close $22.15.
Founded in 2014 and headquartered in Tennessee, Clover Health is a Medicare-backed insurance seller with 458 full-time employees and provides preferred provider organization and health plans for Medicare-eligible consumers through its software platform.
The company garnered attention recently as Redditors picked up on its potential for a short squeeze opportunity, gaining CLOV its “meme stock” status with the likes of AMC Entertainment (AMC), BlackBerry (BB), and GameStop (GME).
Among the online appreciators of the company is Chamath Palihapitiya, American venture capitalist and CEO of Social Capital, who placed a $16 million bet on the special purpose acquisition company (SPAC) that allowed Clover to go public. Palihapitiya, who is no stranger to internet-fueled market frenzies, saw his investment skyrocket to $682 million after a Tuesday gain of over 30%.
Sentiments surrounding the recent rally starkly contrast those back in early February when Hindenburg Research, an investment research firm with a focus in activist short-selling which also publishes reports on alleged fraud by other companies, claimed that Clover had lured investors into purchasing its shares without disclosing its ongoing investigation by the Department of Justice. This triggered a spiral in Clover’s share price to its record low of $6.31.
Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter: @thomashumTV
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