It looks like short-sellers have not yet reached the peak of their demise. So in the latest addition to the roster of favorite meme stocks, Clover Health makes the shortlist.
The Nashville, Tennessee-based entity specializes in providing health insurance and medical plans across eight US states. It made its public debut earlier in the year through a special-purpose acquisition deal, run by the leader in Chamath Palihapitiya.
On Tuesday’s regular session, CLOV stock hiked as much as 109% during its official inauguration as the newest Reddit bias.
Share price eased during the tail-end of the session and closed the day with an 85.82% increase. This translates to a net change of $10.23 to $22.15 per share, which is almost double the June 7 closing price of $11.92.
Moreover, the hype does not plan to lose any of its steam anytime soon. The medical insurance provider looks to open June 9 session with another 7.45% addition to $23.80 per share.
Analysts noted that retail investors and new traders currently lead the upward trajectory. As a result, traders race to join the bandwagon instead of missing their chances on profitability. This is similar to what happened during the GameStop craze.
Over $14 billion worth of shares exchanged hands during the session, which is its highest trading volume recorded since IPO so far.
The stock’s market value currently managed to hit $9 billion, making it another of the overnight billionaires in the market. It ended the first trading day with a $7 billion market capitalization during its initial public offering in January.
On the other hand, only weeks after such a fete, reports claimed that the company is under a Department of Justice investigation.
Is It Safe to Hop on The Clover Health Investments Frenzy?
Since then, Clover Health Investments lost its market appeal and has traded on a steady low, reaching its 52-week bottom of $6.31 mid last month.
Another significant factor that contributed to dented market attention is the staling appetite for SPACs.
Since the deal has no real, tangible commercial operations, investment in such a scheme is multiple times riskier. As a result, traders much preferred the good old traditional initial public offering, despite the wide disparity in price.
Nevertheless, it looks like it managed to make it past that difficult era now. Call options with a $30 a share strike price have now become the latest market favorite.
Meanwhile, in an update on other meme favorites, AMC Entertainment remains on the top of its game. It closed Monday with a 17% hike.