The so-called ‘King of SPACs” is facing some tough questions, as Hindenburg Research, the company that famously shorted Nikola Motors and released a white paper exposing their misdeeds, does the same for Clover Health, a company Chamath took public via an SPAC. Hindenburg also clarified that they did not even hold a short position in $CLOV as they raised their concerns.

Hindenburg, best known for its takedown last year of EV startup Nikola, charges Clover Health “and its Wall Street celebrity promoter, Chamath Palihapitiya, misled investors about critical aspects of Clover’s business in the run-up to the company’s SPAC go-public transaction last month.”

Specifically, the report accuses the Nasdaq-listed Clover Health (ticker: CLOV) of failing to disclose “that its business model and its software offering, called the Clover Assistant, are under active investigation by the Department of Justice (DOJ), which is investigating at least 12 issues ranging from kickbacks to marketing practices to undisclosed third-party deals, according to a Civil Investigative Demand (similar to a subpoena) we obtained.”

Palihapitiya has become something of a populist hero to retail investors, particularly the Reddit brigade. Sure enough, Clover Health investors and stock watchers took to Twitter on Thursday to urge Palihapitiya to give his side of the story, ostensibly to support the stock price amid a free fall. They also sought to martial investor support from fellow day traders to buy into the stock, evidently to trigger a rally, and squeeze out the shorts.


While it may have been an innocent oversight, it’s nice to see cracks in the foundation of a guy who always seemed too cool for school.