Clover Health shares tumble in another wild day for meme stocks (updated)
09/06/2021 11:14
(New throughout, updates prices, market activity and comments)
June 9 (Reuters) - Shares of Clover Health Investments Corp
CLOV.O slid on Wednesday, a day after the new retail trader
favorite soared about 86%, the latest meme stock to join the
frenzy this year.
The Medicare-backed insurance seller's shares were recently
down around 13% at $19.20 after climbing to nearly $29.
Clover Health has been among the most visible of the new
meme stocks to enthrall investors following forums such as
Reddit's WallStreetBets. The fresh crop shot higher in recent
days following a resurgence in shares of video game retailer
GameStop Corp GME.N and movie theater company AMC
Entertainment Holdings AMC.N .
Many of the shares have taken a wild ride, with daily gains
or losses in double-digit percentages.
"There are plenty of people making money, but there are
plenty of people getting their heads handed to them," said Ken
Polcari, founder and managing partner at Kace Capital Advisors.
"These names are risky because they're ripping all over the
place."
One fresh name joining the rally was prison operator Geo
Group, whose shares jumped as much as 70% and were recently up
56% on the day. urn:newsml:reuters.com:*:nL3N2NR39F
AMC shares were down about 11% while security solutions
provider BlackBerry's U.S.-listing BB.N edged 1% higher.
In the past two weeks, meme stocks have received $1.27
billion of retail inflows, according to Vanda Research. That
matched their peak in January, when a surge in shares of video
game retailer GameStop pushed bearish investors to unwind short
positions, further boosting the stock price. urn:newsml:reuters.com:*:nL2N2NR1DP
The group has seen larger inflows than any other sector,
including the S&P tech sector, Vanda's data showed.
Shares of GameStop were up 4% ahead of quarterly results due
after the bell, with a cult following of investors looking for
progress in a turnaround at the retailer. urn:newsml:reuters.com:*:nL2N2NQ1RI
At a brief annual shareholders meeting ahead of the report,
GameStop top shareholder Ryan Cohen, the billionaire co-founder
of online pet supplies retailer Chewy CHWY.N , was elected
chairman. GameStop announced his nomination in April.
Lordstown Motors Corp's RIDE.O shares reversed losses and
were recently up nearly 4%. A day earlier they tumbled 16.3%
after a "going concern" warning. urn:newsml:reuters.com:*:nL3N2NQ431
Surging meme stock prices have spurred some hedge funds into
using options to bet against them while capping risk, seeking to
avoid the fate of Melvin Capital, which was hit with a short
squeeze after betting against GameStop. urn:newsml:reuters.com:*:nL3N2NM3XE
Clover's stock has climbed about 14% year-to-date. By
contrast, AMC shares are up around 2,235% while GameStop's have
gained some 1,560%.
(Reporting by Sagarika Jaisinghani and Aaron Saldanha in
Bengaluru and Sinead Carew in New York; Additional reporting by
Ira Iosebashvili in New York; Editing by Sriraj Kalluvila and
David Gregorio)
((Aaron.Saldanha@thomsonreuters.com; +91 80 6749 1130; Reuters
Messaging: Aaron.Saldanha@thomsonreuters.com@reuters.net))