Shares of Clover Health (NASDAQ:CLOOV), a Medicare insurance start-up that went public via Chamath Palihapitiya’s SPAC, jumped 45% on Tuesday after surging 32% in the previous session.
Chatter about the duo grew on Reddit’s WallStreetBets forum, which now has more than 10 million participants. The infamous chatroom has been all over AMC Entertainment in the past week as traders piled into shares and call options of the movie theater chain and drove the stock up more than 110% in June.
Earlier this year, Clover shares tumbled after short seller Hindenburg published a scathing report that called the company a “broken business.” Clover said in February that it received a notice of investigation from the Securities and Exchange Commission and that it intends to cooperate.
The U.S. Securities and Exchange Commission said Monday it’s keeping a close eye on the recent wild trading in certain stocks to determine if there have been “any disruptions of the market, manipulative trading, or other misconduct.”
First-quarter 2021 earnings weren't good enough to offset short sellers betting against the stock after it was noted earlier this year the Medicare insurance technologist is under federal investigation for how it compensates physicians for using its software.
In the past year, the penetration of CA amongst existing members was at 56%, representing a whopping 43% increase on a year-over-year basis.
The company has a massive geographical reach across more than 100 markets in seven different states in the United States. As of February this year, its membership numbers were at an incredible 66,000.
Clover believes it has a colossal addressable market of roughly $270 billion in annual spending, which could rise to $590 billion by 2025. Hence, a solid moat and its ability to continually expand making it one of the fascinating plays in its sector.
CLOV shares leaped $5.49, or 45.9%, to $17.39.
