Stocks

Clover Health (CLOV) Skyrockets on Meme status

Shares of Clover Health (CLOV), a Medicare insurance start-up, jumped more than 100% at one point on Tuesday. Chatter of Clover grew on Reddit’s WallStreetBets forum, which now has more than 10 million participants.

Clover has already traded over 300 million shares in the morning, which is 13 times greater than its 30-day average volume of 22 million shares. Clover’s popularity surged on Reddit’s WallStreetBets community, which currently has over 10 million members. On Tuesday, Clover’s name was the most often spoken in the famed chatroom.

According to S3 Partners data, Clover Health is experiencing a short squeeze, with 43.5 percent of its float shares sold short. This compares to around 18% short interest in AMC. When a highly shorted company unexpectedly rises in price, short sellers are obliged to purchase back shares and settle their short position in order to limit their losses.

As the stock rebounded from the first fall caused by the SEC inquiry announcement, short sellers increased their negative holdings. According to S3, the number of shares shorted has climbed by nearly 25% in the previous 30 days.