No Short Squeeze Possible -- Reason 3
The latest Short Interest shown for Clover is 40,456,716 shares, which has increased somewhat from levels in March/April following the closing. This seems high relative to "shares outstanding" that are shown on some websites. But these shares outstanding are not fully indicative of actual shares outstanding.
For example, the combined Pro Forma at December 31, 2020 for the SPAC deal showed the combined company with 404,440,809 shares outstanding.
The March 31, 2021 Quarterly Report uses 376,170,5445 as the basic shares outstanding after the merger (compared with 88,330,996 as of December 31, 2020 before the SPAC merger). However, the 376 million figure excludes additional dilutive shares as noted in the footnote:
"Because the Corporation had a net loss in the three months ended March 31, 2021 and 2020, the Corporation’s potentially dilutive securities, which include stock options, restricted stock, preferred stock and warrants to purchase shares of common stock and preferred stock, have been excluded from the computation of diluted net loss per share, as the effect would be anti-dilutive. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders for these periods is the same."
More importantly, the 88 million figure for December 31, 2020 (pre-merger) was grossly incomplete. It excluded convertible preferred shares (convertible into 139,444,346 shares), common stock issued for warrants exercised pre-merger (7,205,390 shares), and convertible debt conversion (75,084,703 shares), so the December 31, 2020 equivalent diluted share equivalents were over 310 million shares. Plus other outstanding warrants and stock options. If anyone is using the 88 million figure to calculate short interest ratios, they are either grossly misinformed, or they are deliberately misleading.
Bringing the data forward, there was issuance of common stock related to the PIPE investment and merger (146,373,904 shares, less reduction of previous Class B shares by 49,975,104 shares, and minor stock option adjustments. The convertible preferred and convertible debt above were in fact converted to new shares at the time of the merger. In total, there were 148 million Class A shares and 260 million Class B shares at the time of the merger, or 408 million equivalent Class A shares (each Class B share is convertible to 1 Class A share). So any short ratios should be measured against the 408 million shares. or perhaps 447 million shares if you count the outstanding warrants.
