Clover Health Investments, Corp. (CLOV)

CLOV vs. other popular stocks on here is different, in that those other popular stocks are purely a squeeze with 90%+ downside, once the chain reaction of selling starts, and that could be any day.

What makes CLOV different, is that it is a growth and tech company with solid revenue and a path to scalability. The others are 121 year old businesses and 37 year old businesses, which when a business is that mature and distressed and having liquidity issues, the cash raised from new shares is essentially burned just to keep the lights on. With CLOV the cash is spent on growth initiatives and R&D, PP&E, completely different. The way you would value a tech company usually involves a premium due to higher growth projections, vs. brick & mortar not having that same level of scalability that a tech firm doing innovative things in the healthcare space would have, especially given this administrations focus on healthcare initiatives.

You can look at something as a pure squeeze opportunity and look at short interest in hopes of going to the moon, but the limited downside is the key here. Since retail is far more likely to panic sell on a dip and eventually take profit, the fact that this is owned by institutions like Vanguard that are less likely to exit a position based on any technicals, and focus on fundamentals, makes this the more conservative play which seems to have limited downside risk due to there actually being a company that is not tremendously over valued on fundamentals. The company has a good cash position, currently limited to no debt,, which it can always tap into debt markets for growth initiatives. Other companies in this realm are distressed and were once highly distressed, and were able to improve their liquidity purely from allowing investors to convert debt to equity and from issuing new shares, that is not the case with CLOV. From a credit investment standpoint, CLOV is in the best position relative to this particular peer group.

There is a DOJ investigation, but consider the space they are in. These industries are far more regulated and have significant oversite by the government, Usually when a tech firm starts to show they can build an unfair advantage, that is when the government starts to look over their shoulders. FB, AMZN, Googl, AAPL, are all some of the most successful businesses in the history of capitalism, they will not be shut down ever. They will have oversight, because as technology evolves the law needs to evolve as well. When a business begins to sell at a discount because the government thinks they are going to create shortcuts and make it difficult to compete with them, those are some of my favorite times to buy. Look a what happened with all of big tech, every time there was a regulatory threat, they defeat it. A business that is not innovative and has been around 120+ years, is obviously not going to get investigated by the DOJ. The reason CLOV was heavily shorted vs. others is a short term play.

If you need to go to the moon, would you pick a Rocket that has a high probability of exploding the first launch, or pick one that has the ability to re-launch repeatedly and safely if it does not make it on the first attempt? That is how I view CLOV vs the peer group in that the downside risk at this specific price is limited in comparison

I looked at AMC's chart today, and I saw that they were sitting at 14.03 per share on Tuesday May 18. Then it dropped sharply the rest of the week, and finished at 12.08 per share on Friday May 21. Sound familiar? CLOV did something similar last week, and then closed at 12.04 on Friday. Almost exactly what AMC did. Just 4 cents difference. Then on Monday May 24, AMC rose to 13.68 a share. Then it sharply went up every single day that week, and then the short squeeze began. Hopefully, CLOV will repeat that same pattern. I can't guarantee that it will, anything can happen......but I'm crossing my fingers. Even if another short squeeze doesn't happen, I still think that CLOV is a great long term investment.