Palihapitiya-Backed Clover Gains Again in Reddit-Driven Ride
Palihapitiya-Backed Clover Gains Again in Reddit-Driven Rally
(Bloomberg) -- Clover Health Investments Corp., the health-insurer backed by venture capitalist Chamath Palihapitiya, jumped on Tuesday, adding more than $800 million in market value, amid renewed interest from retail traders.
The stock rallied 22% higher in New York trading, its biggest one-day gain in three months, to close at $10.80, the highest since July 2. Trading volume rose to more than three times the three-month daily average, with retail traders touting the stock on Reddit’s WallStreetBets forum.
While smaller in scope, Tuesday’s rally was reminiscent of another jump earlier in the summer when Clover was swept in meme-share mania. The stock is still down more than 50% from its all-time high.
About 14% of the Clover’s public float or $248 million is sold short according to S3 Partners. The Medicare plan seller recently raised its revenue outlook after changing how it accounts for some of its sales. Analysts however still remain cautious on the stock.
“We await signs of greater stabilization and execution,” Citi analyst Ralph Giacobbe said in a Sep. 1 note. He rates the stock neutral.
None of the four analysts covering Clover recommend buying shares while two rate it a hold and two say sell.
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