Clover Health Investments (NASDAQ:CLOV) shares have dropped 50% of their value since the start of the year, and most traders are betting against it. Interestingly, there is a lot of demand to capitalize on its downfall, with around 37% of the company’s entire float already shorted.
Due to this gloom and doom, the stock has attracted traders’ attention on e/WallStreetBetsSubReddit. This is the same group of traders that orchestrated the 2,463% short squeeze on GameStop (NYSE:GME) stock at the beginning of this year. As a result, there is concern whether Clover Health will play out just like GameStop.
Short-selling research firm Hindenburg claimed on February 4 that Clover Health is a broken business with several red flags. The company overbilled Medicare with a charge of $200 per visit for doctors to use Clover Assistant. Insiders claim that Clover Assistant’s quality is poor with old and irrelevant diagnoses that are challenging to remove after patient recovery.
Regardless of the challenges, Clover Health is legit, and the stick is worth keeping an eye on in the coming months.
Finance and Entertainment Reporter
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