(Reuters) – Well-known short-selling specialist Hindenburg Research published a critical report on Thursday on Chamath Palihapitiya-backed insurance firm Clover Health, sending the company’s shares down 5.4%.
Venture capital investor Palihapitiya, who held a 27% stake in Clover Health as of Jan. 7, was among the big financial names to support last week’s GameStop buying frenzy against institutional short-sellers, saying early in the slugfest that he had bought into the video game retailer.
The report, whose title called Clover Health a “broken business”, risks reheating the battle between hedge fund short-sellers and investors over a number of U.S. companies.
Clover Health did not immediately respond to a Reuters request for comment.
Hindenburg said in the report that it had no investment position in Clover Health.
Citron, another of the financial world’s famous short-selling research houses, said last week it would not be publishing reports recommending shorts any longer.
Clover, which sells Medicare-backed insurance plans, went public through a $3.7 billion deal with a special purpose acquisition company (SPAC) backed by Palihapitiya. Its other investors had included Alphabet Inc and Sequoia Capital.
(Reporting by Ambar Warrick in Bengaluru; Editing by Patrick Graham and Saumyadeb Chakrabarty)
