(Bloomberg) — Clover Health Inc., a health insurer backed by venture capitalist Chamath Palihapitiya, is riding high once again as the stock soared to a record on Tuesday, driven by chatter on the WallStreetBets forum.
Clover rallied 70% at 11:10 a.m. in New York trading after briefly doubling. Trading volume in the stock was more than 13 times the three-month daily average, with a record of 309 million shares exchanging hands.
Users in the Reddit forum cited a potential short-squeeze taking place with the stock after recent gains. Clover is one of a handful of highly shorted stocks that are once again being swept up in meme stock mania. Workhorse Group Inc. and Richard Branson’s space exploration company Virgin Galactic also advanced.
Bearish bets in Clover have been steadily climbing since March and now stand at over $570 million or 42% of the public float, according to data from S3 Partners. Daytraders also touted the stock’s potential inclusion into the Russell indices — a rebalancing of those benchmarks is expected toward the end of June.
Read more: AMC, Wendy’s Lead Rally as Meme Stocks Rise for a Second Day (1)
“Over the last week we’ve seen an acceleration of short selling with shares shorted increasing by 4.5 million shares, which is nearly half the increase we saw over the last month,” said Ihor Dusaniwsky, S3’s managing director of predictive analytics.
Short sellers were down about $465 million on today’s move for a year-to-date loss of $517 million, he said.
Clover representatives didn’t immediately respond to emailed requests seeking comment.
(Adds details on share volume, meme stocks starting in third paragraph)
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