There’s no shortage of controversial investment options in the market these days. Between cryptocurrencies, meme stocks, and valuations not seen since the dotcom bubble, everyone seems to have an opinion on why something is amiss in the financial markets.
To make an informed decision, it’s important to understand what’s behind the headlines. After all, it takes buyers and sellers to make a trade.
Digging into one of the more unlikely meme stocks — Clover Health (NASDAQ:CLOV) — shows why bulls and bears have conviction. Interestingly, they might not actually disagree on the facts.
1. Merging with Chamath Palihapitiya’s SPAC
Clover was brought public through a special purpose acquisition company (SPAC) owned by Chamath Palihapitiya. A SPAC is a shell company created when investors raise money with the intent of finding and acquiring another company.