Please ensure Javascript is enabled for purposes of website accessibility

Should Investors Be Worried About Clover Health's Class Action Lawsuits?

By Brian Orelli, PhD and Keith Speights - May 7, 2021 at 5:29AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Long-term investors should take a wait-and-see attitude.

Any time shares of a stock drop precipitously, lawyers are going to look for shareholders who might be interested in suing the company. In this video from Motley Fool Live, recorded on March 29, Fool.com contributors Brian Orelli and Keith Speights discuss the prospects of Clover Health Investments (CLOV 6.11%), given the class action lawsuits that have been filed against it. Their conclusion: Long-term investors should take a wait-and-see attitude.

Brian Orelli: Ron wants to know whether there's any news on the class action lawsuit against Clover Health Investments, CLOV. I haven't heard any recent updates, but pretty much any time there's news, you end up with a bunch of lawyers looking for a class action lawsuit. Anytime a biotech drug fails, you almost always see class action lawsuits. It just feels like that's just lawyers trying to make money.

I'm a shareholder of Clover, I'm not particularly worried about the class action lawsuit. The results of the investigation by the government are going to be what they are, and it shouldn't matter too much about the class action lawsuits by the shareholders.

Keith Speights: You and I have talked about Clover Health in the past, and my take on it is just to reserve judgment. Let's wait and see [laughs] what happens. I'm like you, I'm not as worried about the class action lawsuit. We'll see what the government comes out with. I just don't think it'll be anything that seriously hurts Clover Health. They could get dinged, they could get their hand slapped, but I think the company will rock on.

Brian Orelli, PhD owns shares of Clover Health Investments and has the following options: short May 2021 $7.5 puts on Clover Health Investments. Keith Speights has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Clover Health Investments. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Clover Health Investments, Corp. Stock Quote
Clover Health Investments, Corp.
CLOV
$3.30 (6.11%) $0.19

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.