CLOV
Clover Health Investments, Corp
stock NASDAQ

I guess all I’m saying is CLOV is still in the doghouse. It’s still got that meme-y SPAC-y sheen coming off of it. Because of this, Clover has to surprise to the upside with things like earnings and stars to move the stock higher. Simply meeting expectations equates to a negative market reaction for CLOV. I have never been more bullish on the company and the fundamentals long term, but the fact thank CLOV is currently trading LOWER than it was before Q2 earnings was announced does not bode well for positive movement after Q3 or Q4. And because it is basically impossible for stars to surprise to the upside, I’m not really seeing stars as an exciting catalyst, I see more downside risk than upside risk there. Again, to be clear, this is all a discussion of the short term outcomes for the stock, long term, things are cooking very nicely.

Clover Health’s 2027 Medicare Advantage Plans Emphasize PPO Choice, Preventive Care and Member Value - CLOV

I guess all I’m saying is CLOV is still in the doghouse. It’s still got that meme-y SPAC-y sheen coming off of it. Because of this, Clover has to surprise to the upside with things like earnings and stars to move the stock higher. Simply meeting expectations equates to a negative market reaction for CLOV. I have never been more bullish on the company and the fundamentals long term, but the fact thank CLOV is currently trading LOWER than it was before Q2 earnings was announced does not bode well for positive movement after Q3 or Q4. And because it is basically impossible for stars to surprise to the upside, I’m not really seeing stars as an exciting catalyst, I see more downside risk than upside risk there. Again, to be clear, this is all a discussion of the short term outcomes for the stock, long term, things are cooking very nicely.

Clover Health’s 2027 Medicare Advantage Plans Emphasize PPO Choice, Preventive Care and Member Value - CLOV

I agree that a positive catalyst is traditionally “actual vs. expectation” not “actual vs. previous”, but I don’t think that applies to small caps owned by retail that are mostly unfollowed by analysts entirely. If CLOV gets 4.0 stars the headline is “Clover Health’s Star Rating Drops to 4.0 Stars”. The nuance of it will get lost, as it always does, and the takeaway becomes negative, however fundamentally flawed that takeaway might be. Also, correct me if I’m wrong, but it is my understanding that the “harder requirements this year” are actually EASIER requirements for CLOV specifically, due to the fact that they excel in HEDIS. In my opinion, 3.5 stars would be catastrophic for the stock in the short term, 4 stars would be moderately negative and 4.5 stars would be neutral. Only 5 stars would act as an actual positive catalyst in my opinion. From my understanding, the chance for 5 Stars is actually NOT zero, but it is definitely highly unlikely. Another thing to consider is the Stars ratings as they come out in October are going to have a massive asterisk next to them, which in my mind creates a scenario for lots of volatility. IF CMS hands Clover a 3.5 Star rating in 2 weeks and we see that it was THE SAME MEASURES that CLOV sued over and won that dragged their score down, there will be an immediate, aggressive legal action by Clover. CMS lost that case, and they will likely lose any appeal in my opinion, because if you understand English and logic, you can plainly see that they are breaking the law with how they determine Stars. So I think long term, CLOV has a great chance of holding onto 4.5 stars and moving toward 5 stars, as long as the legal ruling here stands. It should stand and hopefully become further enshrined into law with the loss of an appeal, but my pessimism and skepticism with the U.S. regulatory industrial complex knows no bounds, so I am ever mindful that this can all fall apart legally regardless of what is true or right.

CLOV