Clover Health’s Stock Price Surges After Becoming New Reddit Darling

Shares in

Investing in the health of clover Corp.

CLOV 32.44%

soared after showing up on Reddit forums as the newest retail target.

The healthcare company’s share price rose over 32% on Monday and rose another 30% in pre-market trading on Tuesday. It is currently buying and selling above $ 15 per share, while it was valued at $ 7.64 late last month. Over 125 million shares were traded on Monday, almost an eight-fold increase from Friday.

Clover Health went public on January 8th by merging with a special purpose vehicle (SPAC). Founded in 2013, it offers private health insurance and Medicare plans.

The company’s share price hit Hindenburg Research a few weeks later. vacuum issue a report claiming it misled investors. The management of Clover Health denied the report at the time. SPACs have since fallen out of favor with investors as inflation concerns fueled a move away from growth stocks and many saw significant declines.

Some Reddit users speculate that Clover Health could be a candidate for a short squeeze that is marked by high levels of investors betting on the stock to fall. If the stock price rises significantly instead, short investors could be forced to buy the stock to cover their positions, which could accelerate the stock upward.

A representative measure for the short-term interest, the percentage of the loaned shares, is according to data from. at 9.7%

IHS Markit.

Although this has more than doubled compared to March, it is well below the level that was previously for stocks such as

GameStop,

which was over 80% in January.

This doesn’t put off some Reddit users. “Monkeys who missed $ GME! Listen, $ CLOV is ready to take off! ”Wrote a user walking through u / pvr90 on Tuesday. Ape is a nickname given to buyers of

AMC Entertainment Holdings Inc.

Stocks that have been some of the most actively traded meme stocks in the past few weeks.

Unlike stocks of AMC and GameStop, which are up nearly 2500% and 1400% respectively this year from Monday’s closing price, Clover is still 29% down for the year.

Others on Reddit are hoping Clover Health could be included in the Russell 2000, a widely used small-cap index, though it’s not clear if that would be enough to help the stock price surge.

Index provider FTSE Russell will adjust the constituents of its indices on June 25th. The company announced that 38 new companies will be added to the Russell 2000, 21 of which will be classified as Healthcare. Funds that mimic widely used indices must buy stocks added to the index.

Write to Anna Hirtenstein anna.hirtenstein@wsj.com

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