On Reddit and on the internet, meme mania is alive and thriving. Stocks with significant short interest are still a hot topic of discussion in important forums, luring retail investors to the year’s popular “apes vs. suits” clashes.
Today, Wall Street Memes has highlighted a stock that may be on the verge of a short squeeze — and, as a result, on their way to the moon.
What are Short-squeezes?
A stock must have substantial short selling activity (at least 15% short interest, as a rule of thumb) followed by a rapid surge in purchasing volume to trigger a short squeeze. Short sellers are “squeezed” into closing their positions if the conditions are appropriate, as losses grow and margins are depleted.
Short selling in large amounts is generally connected with a firm that is experiencing issues with its business fundamentals. Some retail investors have recently expressed displeasure with the practise, citing the fact that some of their favourite stocks have been the victim of ruthless short selling.
Clover Health (CLOV)
Clover Health (CLOV), dubbed the “King of SPACs” by some, is another stock popular among apes. The company, which specialises in AI (artificial intelligence) in the medical area, has been targeted for shorting, owing to some of its business methods being questioned.
On the chart over the last month, the stock has been steadily declining. The stock peaked at $14.12 on June 23, and has since fallen to $8.54. The company’s average volume is 54,630,600 shares, with a total volume of 21,318,599 shares, with a day’s range of $8.50 to $9.44.
Recent news about CLOV
Clover Health Investment announced on July 22 that it will purchase all of its unpaid shares for $0.0001 per share. The business can acquire its outstanding public warrants if the price of the common share is less than $10.00 during the 20-day period, according to the Warrant Agreement.
In addition, the revolutionary technology business that aims to enhance the health fair for low-income American retirees announced the date for the second quarter’s financial results. The findings will be released after the market closes on August 11th.
High short interest
CLOV now has a short interest of 27%, according to Market Beat data. The Department of Justice is investigating Clover Health for 12 alleged patent infringements, according to a report by Hindenburg Research. With a float of 129.1 million shares and an average trading volume of 59.6 million, the stock is likewise actively traded.
In June, CLOV saw a short squeeze, with the stock price increasing by more than 200 percent between late May and early June. Since then, the stock has been declining week after week, with a total loss of 63 percent since its peak on June 8.