Health insurance technology startup Clover Health saw its share prices surge some 109 percent on Tuesday (June 8) after Redditors talked up the company on forums like r/WallStreetBets, r/stocks and others.
Share prices dropped off to a 48 percent increase and at around 3:30 p.m. on Tuesday (June 8), the stock prices ticked back up, bringing the per-share price to a little over $22. The increases follow a 32 percent surge on Monday, the Wall Street Journal reported on Tuesday (June 8). Clover Health’s stock was valued at $7.64 at the end of May.
Co-founded in 2014 in Nashville, Tennessee, by Vivek Garipalli, the company offers Medicare and private health insurance plans and aims to recreate healthcare for senior citizens. The company went public on January 8 via a merger with the special purpose acquisition company (SPAC) Social Capital Hedosophia headed by Chamath Palihapitiya. The startup trades on Nasdaq under the ticker CLOV.
Clover Health’s price surge hasn’t reached the heights of AMC, which is up over 2,500 percent, or GameStop, up more than 1,500 percent so far in 2021. Enthusiasm for Clover Health on the Reddit forum r/WallStreetBets began about a week ago after some users started talking up the stock, the WSJ reported.
The Securities and Exchange Commission (SEC) in January launched a probe into Clover Health after short-seller firm Hindenburg alleged that the startup did not inform investors of an investigation by the Department of Justice before going public.
The SEC also is probing the rising value and chatter around meme stocks and is looking for evidence of manipulation or other improper behavior. Wall Street also started taking a closer look at meme stocks this month, prompting some of the top brokers and bankers to re-evaluate risk controls. In mid-May, meme traders talking up AMC stock on social media was largely the cause of AMC’s five-day rally.