When Clover Health (NASDAQ:CLOV) tested multiple bottoms from March to May, it set up a technical June rally next. Hindsight is 20/20 and does not make money. Speculators now know the CLOV stock spike from $8 to $28.85 in June would not last.

Bears are not done betting against Clover. The short float is over 25% and the stock is back to $8.

What went wrong with Clover Health?

CLOV Stock Going Nowhere

Reddit’s r/WallStreetBets glorified the CLOV meme trade because of its association with the four-leaf clover. Clover is anything but lucky. It is a boring insurance company that offers Medicare Advantage plans. Notable executive changes made last month will not inspire shareholder confidence. Clover announced on July 15 that Joe Wagner, its chief financial officer, would leave the company.

Wagner said, “I deeply believe in and support Clover’s focus on health equity and mission to improve every life. I will be watching and cheering along the way.” Markets speculated that when the chief accountant left the firm, it would signal weak quarterly results ahead.

They were partially wrong.

On Aug. 11, Clover posted revenue growing by 140% year-on-year to $412 million. Clover stock rallied close to $10 before ending the week at $8.22. The company said that Clover Assistant is on track to manage over $1 billion in revenue. Yet in the second quarter, it posted an adjusted EBITDA of negative $138.7 million. This is due to net medical claims incurred rising to $458.5 million, up from $119.3 million last year.

Clover’s wild trading since its peak in June suggests that speculators already closed their bullish bet. With nearly one-quarter of the float short (at 22.59%), bears have a heavy bet against Clover’s prospects.

On July 9, Clover announced two executive appointments. It added a chief growth officer, filled by Prabhdeep Singh. Justin Joseph will take the chief strategy and development officer role. Singh comes from WeWork. As executive vice president and global head of marketplace, he led WeWork’s strategy for its digital platform. Given WeWork’s massive valuation loss from $47 billion to $2.9 billion last year, this hire is unlikely to help Clover.

Justin Joseph’s tenure at Palantir (NYSE:PLTR) sounds more promising. Joseph worked on Palantir’s commercial strategy. He drove global business development in the healthcare, medical device, and digital health sectors. He will lead clover in bridging health care with technology.

Joseph said, “Collaboration between the government and the private sector is an essential facet of America’s ability to innovate.” Any innovation that matches eligible seniors to Medicare will benefit Clover.

Mixed Rating

On Wall Street, Clover has a buy rating, a hold rating, and two sell ratings, according to Tipranks. The average price target is $9.50.

In the first quarter, Clover posted a $76.2 million loss. This is up from a $21.7 million loss the year before. Its financial outlook for the full year 2021 is not any better. Clover Health forecasted Medicare Advantage membership to grow by only 17% to 21% to a range of 68,000 to 70,000 by Dec. 31.

Total revenue for 2021 is expected to be in the range of $810 million to $830 million.

Clover expects expenses as high as $270 million for the year. The high expenses are due to investments in marketing, network expansion, and technology. While those costs will support future growth, shareholders will suffer from the stock’s underperformance. Clover will lose between $190 million and $240 million on a normalized adjusted EBITDA basis.

Clover’s warrant liability adds a cloud of uncertainty to CLOV stock. In a footnote, the company wrote that “Due to the difficulty in projecting several components of net income (loss), including the quarter-over-quarter change in the fair value of our warrant liability, we believe it is prudent to no longer provide guidance on net income (loss) and net income (loss) per share.”

Uncertainties Ahead

The post-pandemic world adds to Clover’s uncertainties. Management cannot predict the medical utilization. Furthermore, Clover faces fierce competition from other managed care firms. Customers have plenty of clinical care management firms to choose from.

Clover will need to invest heavily in technology to catch up to the competition. Shareholders will suffer from more quarterly losses. Competitors could merge, putting even more pressure on Clover to grow its market share.

Speculators should dump CLOV stock at any price. The stock is unlikely to earn meme status just as it did in June. The stock enjoyed a temporary, once-in-a-lifetime euphoria that sent its price to unsustainable levels. Short sellers are betting heavily against Clover. A bigger-than-expected loss will send the stock lower, rewarding the bears.

Bears have a good chance of profiting from the bet against this firm. Analysts are not behind this company, so a short-squeeze is unlikely to help Clover’s suffering shareholders.

On the date of publication, Chris Lau 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.