A Small Vendor vs Chamat Palihapatiya

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This is the special purpose acquisition craze meeting GameStop Madness.

On Thursday, Hindenburg Research is a short-selling firm known for flagging issues with an electric car company Nikola Last year, released a report, which is Chamath Palihipatiya-backed Clover Health And called it a “broken business”.

The insurance startup agreed to go public in October through a merger with Pilhpatia’s social capital Hyposophia III. “I am one of the most direct investments ever made,” Palihapitiya Said at that time declare.

But in the Hindenburg Research report on Thursday, Clover Health argued Was not so straight: Among other issues, the short-activist group accused the company of promoting sales to older people using deceptive marketing, alleging that Clover did not disclose a Department of Justice investigation into the company’s sales practices.

Clover Health entered back into Hindenburg A long post fridayAccusing the short seller, he said “wrong mistakes and gross misconduct.” While the DoJ had submitted inquiries to the company, Clover Health downplayed the issue, marking it as a regular occurrence in the industry that it did not consider the material for its investors.

But since the Hindenburg report was released, Clover Health has received a notice of investigation from the Securities and Exchange Commission, the company also revealed. Clover Health shares were down 13% on Friday.

Here’s the big surprise about Hindenburg’s report: While short sellers usually issue such papers with a stipulation against the company, Hindenburg has no position in the company. long or short. Instead, the report seems to address a recent flare-up in criticism against short sellers, even though Hindenburg says it began looking into business some four months ago: “We are in this moment for the public markets I think it is more important for people, short sellers play a role in exposing fraud and corporate malfunctions. ”

As investors flooded GameStop shares last week, short sellers were Heavily targeted by Retail merchant. Palihapitya has meanwhile positioned himself in favor of retail traders.

How are you thinking about 2021? Term Sheet has teamed up with Semaphore for its 13th annual confidence survey of private equity and venture capital professionals. In the past, hundreds of you have cheated with your confidence level for the year. Please fill Your responses here.

As a sneak peek, some 62% of you say that you made more in personal income in 2020 than in 2019.

Lucinda Shane
Twitter: @shenlucinda
E-mail: [email protected]


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