The New York Stock Exchange is pictured in the Manhattan borough of New York City, New York, U.S., April 16, 2021. REUTERS/Carlo Allegri/File Photo
Shares of Clover Health Investments Corp (CLOV.O)slid on Wednesday in seesaw trading, a day after the new retail trader favorite soared about 86%, the latest meme stock to join the frenzy that has captivated investors this year.
The Medicare-backed insurance seller’s shares were recently down around 7% at $20.54 after climbing to nearly $29.
Clover Health has been among the most visible of new meme stocks popular with retail investors on forums such as Reddit’s WallStreetBets. The new crop has shot higher in recent days following a resurgence in shares of video game retailer GameStop Corp (GME.N) and movie theater company AMC Entertainment Holdings (AMC.N).
One fresh name joining the rally was prison operator Geo Group, whose shares jumped as much as 70% and were up 46% on the day.
Meme stocks have received $1.27 billion of retail inflows in the past two weeks, according to data from Vanda Research. That matches their peak in January, when a surge in shares of video game retailer GameStop pushed bearish investors to unwind short positions, pushing the stock price still higher.
The group has seen larger inflows than any other sector, including the S&P tech sector, Vanda’s data showed.
Clover Health was the most discussed stock by far on WallStreetBets on Wednesday, according to Swaggystocks.com.
Among other meme stocks, AMC and security solutions provider BlackBerry’s U.S.-listing fell 7% and 5.7%, respectively. Shares of GameStop were up 2.1%.
GameStop is to report quarterly results after the bell, with a cult following of individual investors who fueled its rally looking for progress the turnaround.
Lordstown Motors Corp (RIDE.O) was down more than 10%. A day earlier they tumbled 16.3% after a “going concern” warning.
The recent surge in some meme stocks has spurred some hedge funds into using options to bet against them while capping risk, seeking to avoid the fate of Melvin Capital, which was hit hard after betting against GameStop this year.
Clover’s stock has climbed about 25% year-to-date. By contrast, AMC shares are up around 2,300% while GameStop’s have gained some 1,530%.
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