Short interest in Chamath Palihapitiya-backed Clover Health Investments Corp. (Nasdaq: CLOV) is at 40.6 million shares, data compiled by financial analytics firm S3 Partners shows.
This reflects approximately 37% of the float according to an updated estimate from FactSet, which changed over the weekend after IPO Edge covered the news.
The level can be compared to the short interest in GameStop Corp. that was followed by a retail trading frenzy in January when the shares rose 2,000%, prompting a hearing in Congress. Several other stocks including AMC Entertainment Holdings Inc. and Nokia Corporation went on similar rollercoaster rides.
Shares of Clover soared 20% Friday as chatter that the company could be a prime target for a short squeeze spread through chatrooms and social media boards. Volume was at 250 million shares on Friday, more than 10x times the daily average.
Twitter’s SpacGuru pointed out the pop in Clover shares to IPO Edge Friday.
On Feb. 5, the company said the Securities and Exchange Commission has started a probe after a research report accused the health-insurance company of misleading investors when it went public. That came after short seller Hindenburg Research published a report claiming Clover failed to disclose a Justice Department probe.
Hindenburg said it was not betting against Clover shares, but wanted to show the value of “critical, adversarial research.”
IPO Edge Contact:
Jarrett Banks, Editor-at-Large