Clover Health reverses past gains as some memes stocks slide


The New York Stock Exchange is pictured in the Manhattan neighborhood of New York, New York, United States, on April 16, 2021. REUTERS / Carlo Allegri / File Photo

Shares of Clover Health Investments Corp (CLOV.O) slid in see-saw trading on Wednesday, a day after the new favorite of retail traders climbed around 86%, the latest stock even to join the frenzy that captivated investors this year.

Shares of the Medicare-backed insurance seller recently fell about 7% to $ 20.54 after climbing to nearly $ 29.

Clover Health has been one of the most visible new memes stocks to retail investors on forums like Reddit’s WallStreetBets. The new crop has grown in recent days following a resurgence in shares by video game retailer GameStop Corp (GME.N) and movie company AMC Entertainment Holdings (AMC.N).

A new name who joined the rally was prison operator Geo Group, whose shares jumped 70% and rose 46% on the day.

Meme shares have received $ 1.27 billion in retail inflow in the past two weeks, according to data from Vanda Research. This matches their peak in January, when a rise in shares of video game retailer GameStop pushed bearish investors to unwind their short positions, pushing the share price even higher.

The group registered larger entries than any other sector, including the S&P tech sector, data from Vanda showed.

Clover Health was by far the most talked about action on WallStreetBets on Wednesday, according to Swaggystocks.com.

Among other memes stocks, the US rating of AMC and security solutions provider BlackBerry fell 7% and 5.7%, respectively. GameStop shares rose 2.1%.

GameStop is due to release quarterly results after the bell, with a cult of individual investors fueling its rally looking for progress in the turnaround. Read more

Lordstown Motors Corp (RIDE.O) is down more than 10%. A day earlier, they fell 16.3% after a “going concern” warning. Read more

The recent surge in some memes stocks has prompted some hedge funds to use options to bet against them while capping risk, seeking to avoid the fate of Melvin Capital, which has been hit hard after betting against GameStop this year. Read more

Clover’s stock has climbed about 25% since the start of the year. In contrast, shares of AMC are up about 2,300% while those of GameStop are up about 1,530%.

Our standards: Thomson Reuters Trust Principles.


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