What Happened to Clover Health?
Ticker: CLOVSPAC Year: 2021Merger: 2021
Return
-74.4%
Current Price
$2.5
Peak Price
$28.85
Trust Size
$720M
Summary
Clover Health was Chamath's third SPAC and became a Hindenburg Research target and brief meme stock. The Medicare Advantage insurer was accused of undisclosed DOJ investigations and misleading investors about its AI-powered 'Clover Assistant' technology.
What Happened
Clover Health merged with Social Capital Hedosophia III (IPOC) in January 2021 as a Medicare Advantage health insurance company powered by an AI clinical assistant. Chamath pitched it as disrupting healthcare through technology.
In February 2021, Hindenburg Research published a report alleging that Clover had failed to disclose an active Department of Justice investigation into its business practices. The report also questioned the effectiveness of the Clover Assistant AI platform and alleged undisclosed related-party deals.
The stock initially tanked but then got caught up in the meme stock frenzy of June 2021, surging to $28.85 as Reddit traders piled in. The spike was short-lived, and the stock resumed its decline as fundamentals reasserted themselves.
Clover's projected revenue of $3 billion by 2023 came up significantly short at $870 million â though at least it had real revenue unlike many SPAC peers. The company pivoted from a pure insurance model to licensing its technology platform, but growth remained disappointing. Chamath sold his stake, and the stock settled into zombie territory around $2.50.
Key People
Timeline
2021-01-08
SPAC merger with Social Capital Hedosophia III closes
2021-02-04
Hindenburg publishes report alleging undisclosed DOJ probe
2021-06-09
Meme stock squeeze pushes stock to $28.85
2022-11-14
Revenue hits $870M but falls far short of $3B projection
2023-06-01
Garipalli steps down as CEO, Andrew Toy takes over