WallStreetBets Winners Expanding Horizons
Although WallStreetBets subreddit is often associated with targeting hedge funds for shorting stocks, its original intention was to showcase emerging investment opportunities. With its growing popularity, the recommendations on the forum now carry significant weight, driving highlighted companies to new highs.
One of the latest darlings of the subreddit is Clover Health, a startup specializing in Medicare insurance. Thanks to Reddit investors’ influence, Clover Health’s stock surged by 45% this morning, following a 32% rise in the previous trading session. While not as prominent as AMC stocks, users of the subreddit consider Clover Health a prime shorting candidate, making it an attractive option for collective investing.
Clover Health surges by 40% at the open & Wendy’s sees over a 10% rise, as Reddit-driven trading frenzy extends to more stocks https://t.co/WhRytamHKM pic.twitter.com/HnESEZzm6q
— CNBC Now (@CNBCnow) June 8, 2021
“This seems like the perfect scenario for a combined short and gamma squeeze. I don’t see why CLOV couldn’t reach the price levels of AMC from last week (>$70). It might even exceed that,” mentioned a specific Reddit user.
Prior to this surge, Clover Health was facing difficulties, with a report from short seller Hindenburg Research branding the company as “flawed.” Furthermore, Clover Health was under SEC investigation back in February, which negatively impacted its reputation.
In addition to Clover Health, WallStreetBets has shown heightened interest in the fast-food chain Wendy’s, experiencing a 15% increase in stock prices today without any significant catalyst. While Wendy’s recently reported slightly better-than-expected profits last month, in the volatile world of meme stocks, even modest news can trigger substantial movements.
