Clover Health Investments Corp (CLOV)

[Corundum]

No Short Squeeze Possible -- Reason 2

"This prospectus relates to the offer and sale from time to time by us of up to 7,863,817 shares of Class B common stock reserved for issuance by us upon exercise of options to purchase Class B common stock held by former employees of Clover (as defined below) under Clover’s 2014 Equity Incentive Plan."

These stock options are held by former employees.

"As a result of the Mergers, among other things, all shares of Clover common stock reserved in respect of Clover stock options outstanding as of immediately prior to the effective time of the First Merger, were converted, based on the Exchange Ratio (as defined in the Merger Agreement) of 2.0681, into awards based on shares of Clover Health Class B common stock.We will not receive any proceeds from the sale of the Class B common stock covered by this prospectus other than proceeds from the exercise of the options whose underlying shares of Class B common stock are covered by this prospectus.Each outstanding share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock."

I don't know the option conversion prices for these former employees. I expect they will be in the $10 a share range or less. More importantly, they are unlikely to be higher than $13, so these shares will become available to short sellers long before the stock climbs very high.