CLOV is Gaining (Will it Continue?)

Welcome back, ladies and gentlemen. It's a new day and today we are breaking down Clover Health and why it's running. Is there still room for it to go or have you missed the boat? Let's see. Disclaimer before we get going here, guys, by the way, uh, I am not a financial professional. You should not take financial advice from me. This is just for educational purposes. I'm going to try to help you understand something. What you choose to do with that information is up to you. If you're not sure what to do with this information or you're not sure whether this information is accurate or not, Please go seek out a first source. Check out the SEC filings. Seek out a financial advisor. Do it that way, okay? Disclaimer out of the way on this. So for those of you that are unfamiliar with Clover Health, this is one of the Chamath SPACs. Chamath hit the market like a beast. IPO A, IPO B, IPO C, IPO D, IPO E, IPO F. The SPACs just rolled out, and among them was IPO C. IPO C eventually became Clover Health. There was a big hope for this that Clover Health was a medical stock that works in medical insurance. It had great partnerships with Walmart. Walmart, Walgreens, CVS, all kinds of great stuff going on for it. It looked like it had great potential, came out at about $16, $17 a share after the SPAC, and then bam, Hindenburg showed up, short report on it saying that there was a DOJ investigation on the ticker. So that's the first thing that we need to tackle. Was the decline for Clover Health from $16, $17 down to where it is right now justified? And the big answer to that one is no. Freaking way, guys. There was absolutely no way whatsoever that this was justified. Clover Health had a request for information from the Department of Justice. It was not an investigation. It was simply a request for information. This is something that happens regularly. Again, shorts like to do what shorts do. They blew this out of proportion in this case. They still maintain the narrative that this is an investigation active and ongoing. That is not the case. It was a request for information. The CEO of the company came out and did clarify that position. So that's there, guys. Just let's get that out of the way. So if the short report wasn't of value, uh, the DOJ investigation isn't really what it is, then what are we looking at with Clover Health? What is it going to take to bring it back to where it is? Well, uh, last month I actually took a position in Clover Health, both equity and warrants on this thing, seeing it as it had declined down to around the $8 range. As we go into their earnings, we know that they've expanded into 10 more states in the US, and among those states include Texas, New York, New Jersey, Pennsylvania. Those are big states as far as healthcare is concerned, especially with the exodus of people out of California California into Texas. So what we're seeing is this huge opportunity for growth out of Clover Health. They did announce today that their earnings are expected May 17th. So a lot of people have their eyes on that. It's gonna be a big day that people have circled on their calendars that have been watching this. So the major push I think that's happening today is partially due to them making that announcement that earnings is on the way. Knowing that you've got that firm date, it gives a lot of people some room to play around that we can expect growth up into earnings 2 to 3 weeks out. Now would be a decent time for entry if you'd like to play earnings play, but that's not all. Okay? So there's more. There's another reason why this is seeing some serious growth today. The other big thing that a lot of people aren't talking about in regards to this, you see articles coming out from Motley Fool, from Benzinga, Clover's running and we have no idea why. Well, that's where you actually need to be able to put pieces together and read and not just write clickbait articles trying to drive people in. The reality on Clover Health here, guys, is Biden is talking about the America Family Plan, right? And in the family plan, he is talking about reducing the age to 60 on Medicare, which which is big, big, big, big, big, especially in those big states that I just mentioned. With Medicare age coming down and you've got Clover Health well positioned with its partners to service that community that are now going to give access to that, Clover Health is just looking to capitalize on that in a huge way. When we talk $1.8 trillion going into education and healthcare, a big chunk of that is looking to pump what has been otherwise a fairly tame market in healthcare so far this year and finally start to get some impetus and growth behind that. We do have that added onto this, guys. Okay? So understand that we are there. There's one more thing that we need to address though, and that is the short squeeze myth on this. So let's let's take a look at the short squeeze myth as the last point that you need to consider. Okay? So last but not least with the short squeeze, guys, the myth was this: heading into FINRA numbers that were dropped on Monday after hours, there was a rumor from S3 partners supported by FactSet data. Claiming that there was 144% short volume on this stock. Now, FINRA numbers did come out. They did demonstrate that that was not the case. There's only about 30% short volume on the stock. That narrative is not accurate. There is not 144% short. Now, there are some things to take into consideration though in regards to playing Clover Health, okay? And they are this: there is a lockup on shares for Ian Osborne and Chamath for July. Okay, so end of June, early July, their shares that are Class A shares will come out of lockup and they are able to liquidate those positions. They are able to sell those shares off. So that's one thing you need to be aware of. There is a dilution event that could come there. Now, the other thing that was going on with the short squeeze was there was a large amount of shares that were locked into the Class B shares. Now, these Class B shares are not actively tradable. They're not currently part of the float. The thing that has people talking about these is those shares don't come into existence until Clover Health has reached Thresholds of $20, $25, and $30 for over 90 days. Those Class B shares do not activate until it hits that mark. That has a lot of people suggesting and implying that there is the possibility that Clover Health could run to those levels as the incentive and cash payment for those CEO shares are going to activate once it reaches that level and surpasses that level for an extended period of time. With Clover Health being targeted at a cash incentive for the CEO to reach those levels, A lot of people are speculating that's where we could see it go. Now, those are the points that you need to consider here. For me, guys, the short squeeze is not relevant. It's not a thing that I'm looking to have happen, but the lockup on the shares and the Class B shares coming into existence, those are both dilution events that you have to be aware about as we progress into the month of May and the month of June. The positive catalyst on this, guys, again, just to reiterate, are the fact that we see a beaten-down stock that's well below the level that analysts have it at. Analysts have it at $10, $13, $15 a share. Right now it's up, but we're still not past that $15 a share mark. On top of that, guys, we do see expanded Medicare happening to people down at the age of 60. It could potentially even go lower on some states. New Jersey is talking about 50. We see Clover Health expanding where they can offer their product into big states like Texas, New Jersey, New York, Philadelphia. So that's there as well. In my opinion, guys, there is an extremely strong bull case. So where do I stand on? If I was to put a PT on this for myself, guys, kind of where I'm aiming for this to go is 2025. I don't see it heading to 30 before the end of June. And for me, I personally knowing that that lockup is happening, that Chamath and Osborne can exit their shares into June, July, I probably wouldn't stick around past that. So 2025 for myself is kind of that price target that I think is reasonable for this to move to. Again, guys, I'm not holding an equity position in this. I do have call options into May monthlies. I do have, full disclosure, a large holding of warrants in this position. However, for me, warrants give me a ton of time, guys. I'm not locked into a quick play on this. I think there's a lot of long-term growth potential on this. But again, guys, do your due diligence, make your own decisions on this. Take a look at the Hindenburg report, give that a read over, make your own decisions on that. If you don't know Chamath, do some reading on Chamath and where you see that going, and make your own conclusion as to where you think Medicare is is going to drive the stock. Let me know down below where you see Clover Health going— up, down, price target. Let me know down below in the comment section. If this video was helpful and you're still watching it, make sure you give it a like and subscribe. I go live every morning here, 9 AM, breaking down the stock market with you guys. And then I put out a video every day to help you understand, uh, either things about how to trade your portfolio, uh, potential tickers that are out there, uh, breakdown of DD, uh, something similar to this where we're taking a look at stocks and is the hype real. Um, I will be doing some of these as well. 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