We had a flurry of news last two weeks but nothing is more exciting that this! Chamath is selling 15% of his stake in SoFi ($SOFI) to make some additional investments and of those, Clover Health Investments ($CLOV).
We don’t have the details on how many shares he will buy and if it will be an open-market transaction but all we know that we are expecting CLOV to pop next week. The options market will go crazy, too.
How high do I think it’s going to go? It’s anyone’s guess but here is my take.
- Expects annual revenue: $1.7 billion
- A typical healthcare provider has 2x-3x multiples
- But Clover Health is much more than that. CLOV is a technology company that specializes in AI
- Hence, the right multiple is 7x, which implies that it should be worth $11.9 billion
- Therefore, the right share price should be $28.51 (very similar to the high we saw during the last spike)
Conclusions
- We will see a possible short squeeze in the near future and as early as Monday (November 22, 2021)
- The PT is $28.51 but an expected short squeeze might bring the price higher
- Shorts are fucked!
- Shorts are fucked!
- Shorts are fucked!
As always, do your own DD before you make any investment decisions.