Clover Health (NASDAQ:CLOV) Stock Makes a Big Move: What to do Now?
4:14 pm Wednesday, June 09th, 2021
The meme stock mania, which has primarily been fueled by retail traders from the Reddit community WallStreetBets, has been one of the more remarkable trends in the stock markets in many years. After having subsided for some months, it has returned with a bang and one of the stocks that have become the target of the Reddit investors is the health insurance start-up Clover Health (NASDAQ:CLOV).
Like many of the stocks that have been targeted by these investors, Clover Health also has a considerable short interest. However, the short sellers were punished again as the concerted effort from these retail investors resulted in massive gains in the stock for the second day in a row.
The stock started the trading on Tuesday with a band as it rallied to new heights and ended the day at $22.16 a share, which reflected gains of 86%. Over the course of the past five months, the Clover Health stock has struggled considerably but the gains made this week in two days wiped away all those losses.
In this regard, it is also important to note that the trading volume in the stock soared to a staggering 718 million shares, which is as much as 29 times the average three-day trading volume in Clover Health.
The chatter about the Clover Health stock in WallStreetBets led to the frenzied trading on the stock yesterday. It should be noted that WallStreetBets now boasts of as many as 10 million members and has the capability of moving markets. The stock became the latest target after the investors noticed that the short-sellers had been raising their short positions in recent times.
That made the stock ripe for the classic meme stock short squeeze that has burned many short-sellers over the past months. In a rising market, short-sellers often have to buy back the shares in order to limit their losses and that sends the shares soaring further. It is going to be interesting to see if the Clover Health stock can hold on to its momentum today.
