Clover Health Investments (NASDAQ:CLOV) announced that it has reached settlements for all of the outstanding civil litigation that was filed against the company subsequent to its de-SPAC (special purpose acquisition company) transaction. While the Medicare Advantage insurance plan provider resolved its legal woes, it continues to struggle on the financial front, and its stock has lost substantial value over the past year.
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Clover went public in January 2021 through a de-SPAC transaction. It merged with Chamath Palihapitiya’s Social Capital Hedosophia Holdings in a $3.7 billion deal. However, the company faced several lawsuits alleging that it failed to disclose a Department of Justice investigation and other important details ahead of its IPO.
While Clover settled all litigation following its de-SPAC transaction, it stated that these agreements do not reflect any admission of liability or wrongdoing by any of the defendants.
Meanwhile, on the other hand, the company is struggling to lift its sales and is yet to be profitable. While the company has announced business transformation initiatives to achieve profitability, it has failed to lift investors’ sentiments.
Clover Health stock has lost over 60% of its value over the past year, underperforming the broader markets by a wide margin.
Is Clover Health a Buy or Sell?
Clover Health has now become a Penny Stock and is consistently trading under $1, so it faces the risk of being delisted from the NASDAQ. At the same time, Clover Health stock has received one Buy, two Hold, and two Sell recommendations for a Hold consensus rating. Further, due to the massive decline in its value, analysts’ average price target of $1.51 implies an upside potential of 71.14%.
