Investors do love a good old fashioned short squeeze at the moment and it looks like we might have ourselves another Gamestop situation on our hands. Clover Health the darling child of SPAC guru Chamath Palihapitiya has been trading flat for the past few weeks after what was a massive decline in it’s stock price since it’s highs in late December. Then investors noticed the short percentage.
Financial analytics firm S3 Partners compiled a range of financial data and noticed that Clover Health currently has a short interest of approximately 150%, which is pretty much the battle cry for Wall Steet Bets types to kickstart another Gamestop like squeeze. The markets opened Friday morning and $CLOV was up more than 20% based on the imminent squeeze. Wall street bets were ready for war.
Well, that’s where it get’s interesting. The Hindenburg research group have tried arguing that the short interest data S3 partners used was infact incorrect (bold move). To make a long story short, Hindenburg claimed that S3 partners were not taking into account the stock options awarded to Clover Health’s CEO and therefore made the short interest look a lot higher.
Well that bold move didn’t pay off for them at all. Since then S3 Partners have rebutted their claim and confirmed that their calculation of the current short interest is in-fact correct. For some strange reason, a reason that is beyond any comprehension, the smart people over at Hindenburg Research think stock option’s that are neither granted or executable until a period way into the future should be a part of the float calculation…absurd I know.
So it’s looking like there really is an enormous short interest in Clover Health which might mean that next week this stock could moon. It has the perfect set up. Big research firm and wall street against the normal investor. We will have to wait and see what happens next.
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