Clover Health Shares Pop For Second Day On Now-Debunked “Short Squeeze” Narrative
It appears the crowd over at WallStreetBets may be as relentless as they are oblivious.
Shares of Clover Health – most recently known for plunging after noted short seller Hindenburg Research accused the company, and its resident advocate Chamath Palihapitiya, of failing to disclose a DOJ inquiry before going public – were up as much as 10% Monday morning on what appears to be a now-debunked notion that the company was sporting short interest that rivaled GameStop.
The company became a hot topic on Friday of last week, spiking 20% on the day to close the week, after S3 Partners – a company that is supposed to specialize in data analytics – apparently incorrectly reported during the week that Clover’s short interest as % of its float was more than 140%.
That led to reports like this one, from Benzinga, stoking the fires on Reddit’s WallStreetBets board with talks of yet another potential epic squeeze. The pump was also helped along by Twitter users and traders looking to bottle up some of the GameStop magic again:
Which is all good and well – except the denominator that S3 used to calculate its “short interest as a % of float” number – reportedly an incorrect float number used produced by FactSet – appeared to have been acknowledged as incorrect before the end of the day Friday.
FYI we reached out to FactSet pointing out the error in $CLOV‘s float and they acknowledged that the data used to calculate the short % of float being circulated today was incorrect. It will be corrected to reflect the actual float on next refresh.
— Hindenburg Research (@HindenburgRes) April 16, 2021
The data was quickly challenged by others on FinTwit:
Where did the insane notion that 150% of the float of $CLOV is short come from? Exchange data says 35%. Markit 28%. It’s not even expensive to borrow.
— Midwestern Hedgie (@MidwestHedgie) April 16, 2021
S3 issued a correction on Monday morning at about 0755EST, tacitly blaming FactSet for the data discrepancy and claiming their number of shares sold short “remained accurate”, despite the massive delta between the two “short interest as % of float” data points:
Based on FactSet’s updated and changed Float number for $CLOV, SI % of Float is 36.97% and S3 SI% Float is 26.99%. S3’s own number, its forecast of shares sold short, has remained accurate, and stands at 40.61mm.
— S3 Partners (@S3Partners) April 19, 2021
Prior to that, S3 partners had remained quiet on the situation, despite more than $2 billion in Clover shares changing hands on the surge Friday. When S3’s data was publicly called into question by the end of the day Friday, the company stood by its numbers and pointed the finger at FactSet.
The company’s resident “expert”, Ihor Dusaniwsky, also doubled down on what was, at that point, known to be a potentially incorrect calculation.
The incorrect information caused Clover to record the “2nd highest increase in call option volume for any U.S.-listed company,” FinTwit personality @Keubiko noted.
This S3-fueled explosion of activity also caused $CLOV to record the 2nd highest increase in call option volume for any U.S.-listed company, and the highest increase in put volume. Great job, @ihors3 https://t.co/HwllWSzeo5 pic.twitter.com/o7PC3jpInI
— Keubiko (@Keubiko) April 17, 2021
The company’s trading volume on Friday dwarfed any of its previous trading days. And, if Monday is any indication, Clover could be heading for another heavy-volume day.
— Quoth the Raven (@QTRResearch) April 17, 2021
But hey, who are we to spoil the SPAC party? Retail’s gonna retail…
Mon, 04/19/2021 – 08:10