Why has trade on the Clover Health share price been so volatile?
The Clover Health share price is down 50% year to date as the company finds itself under a SEC investigation and loses SPAC appeal.
Who is Clover Health Investments Corporation?
Clover Health Investments Corp, is a healthcare technology company providing medicare advantage (MA) insurance plans to seniors. The groups offering includes hospital coverage, doctor visits, drug coverage, vision, dental, and hearing coverage.
The group also offers a software platform called the Clover Assistant, provide American seniors with highly affordable, 'obvious' healthcare plans. The company’s flagship software provides physicians with data-driven, personalised insights at the point of care.
Is Clover Health a SPAC?
Clover’s listed debut was through a merger with special purpose acquisition company (SPAC) Social Capital Hedosophia Holdings Corp III late in 2020
Why has the Clover Health share price under pressure?
A share price surge in the middle of the year (2021) appears to have dovetailed with moves in so called ‘meme’ and ‘SPAC’ stocks. The unprecedented gains can largely be attributed to speculative investments from retail traders coordinated on forums such as Reddit (WallStreetBets). These short term gains were however quickly unwound.
The Clover Health share price is down more than 50% year to date (as of 21 July 2021). The company boasts exciting propositions to help better a widely criticised US healthcare system, although the group remains unprofitable at present.
While the company originally forecast ambitious membership numbers in 2021, these numbers have been revised lower as the year has progressed. Clover Health is now also under investigation by the US Securities and Exchange Commission (SEC) on allegations that the company and its promoter, Chamath Palihapitiya, misled investors while promoting the business.
Clover Health share price – technical analysis
The share price of Clover Health has been in a sharp downtrend since June this year. The aggressive decline now sees its historical low at 6.20 as the next support target from the move. The Stochastic labouring in oversold territory is suggestive that short-term traders should not look to bet on a rebound just yet from current levels. Traders hoping for a rebound might prefer to see the price at least starting to trade above the dotted trend line on our chart, accompanied by a sharp move out of oversold territory.
Summary
- Clover Health is a healthcare technology company providing MA insurance plans to seniors
- The group also offers a software platform called the Clover Assistant, provide American seniors with highly affordable, ‘obvious’ healthcare plans
- Clover’s listed debut was through a merger with SPAC Social Capital Hedosophia Holdings Corp III late in 2020
- The unprecedented gains mid-year can largely be attributed to speculative investments from retail traders coordinated on forums such as Reddit (WallStreetBets)
- The share price is down more than 50% year to date (as of 21 July 2021)
- Clover is under investigation by the SEC on allegations that the company and its promoter, Chamath Palihapitiya, misled investors
- The share price has been in a sharp downtrend since June 2021
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Act on share opportunities today
Go long or short on thousands of international stocks with spread bets and CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
