Source: Clover Health
Investors should back away from Clover Health after Reddit traders helped to cause a shortage in the heavily shorted insurance stock, according to Bank of America.
The stock closed at $16.92 per share on Wednesday, up more than 120% in June, and briefly traded above $28. The company, which went public through a special purpose acquisition company deal aided by billionaire Chamath Palihapitiya, has become favorite of social media traders in the past week.
Bank of America analyst Kevin Fischbeck downgraded the stock to underperform from neutral, saying in a note to clients on Thursday that the fundamentals couldn’t support the stock price.