Investors in short squeeze hopeful Clover Health (NASDAQ:CLOV) and CLOV stock are seeing some pretty hefty gains today. Indeed, shares of this Medicare Advantage insurer are up more than 7% at the time of writing on a relatively flat day in the market.
Now, volatile swings aren’t necessarily out of the ordinary for CLOV stock. After all, this is a company that’s been touted as a meme stock and has traded as such. The price action with CLOV stock has resembled many of the company’s meme-stock peers. Accordingly, investors looking to take advantage of this volatility appear to be doing so right now.
One of the key reasons for this is that Clover Health is expected to release its earnings this week. The company will report earnings on Aug. 11 after market close. Given the earnings volatility we’ve seen with so many stocks this year, it appears a run-up into earnings is something investors have anticipated. Accordingly, this pre-earnings run-up seems to have started early this week.
However, there’s another big catalyst driving CLOV stock today. Let’s dive into what has Clover bulls excited right now.
CLOV Stock Higher on Potential Medicare Expansion Plan
Today, two key facets of the Democrat’s upcoming $3.5 trillion budget have caught the eye of investors in CLOV stock. These include a lowering of the eligibility age for Medicare from 65 to 60, something President Joe Biden supports. Additionally, there is a proposal for expanding the services offered to include dental, vision and hearing.
For Medicare Advantage players such as Clover Health, this announcement is broadly bullish. By expanding the eligibility requirement for Medicare, the economics of Clover’s model becomes more attractive. More prospective patients and a larger potential market mean a wider patient pool from which to generate cash flows over time. For CLOV stock bulls, this is very good news.
Reports note that these proposals are still in the early stages of being discussed. Accordingly, a final bill may be different than what was proposed today. However, these moves signal a bullish potential regulatory shift for investors in CLOV stock. And as we’ve seen, any catalyst is a good catalyst these days.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.