What happened
Shares of Clover Health Investments (CLOV -1.51%) were up by 18% for the week as of 2:15 p.m. ET on Friday, according to data provided by S&P Global Market Intelligence. The healthcare insurance services company's stock closed last week at $0.9984, then rose to as high as $1.24 on Thursday after the company said it had settled seven derivative lawsuits.
So what
The lawsuits, which were pending in Delaware, New York, and Tennessee courts, were part of civil litigation that was filed following Clover's de-special purpose acquisition company (SPAC) transaction in 2021.
Clover said both sides had entered into a memorandum of understanding. The settlement doesn't involve any monetary payment other than fees and expenses to plaintiffs' lawyers. Clover denied all wrongdoing and said it entered into the settlement to end the costs of continuing litigation. In April, the company had settled for $22 million, a securities class action suit connected to the de-SPAC.
Now what
The move not only put an end to the cloud that had been hanging over the company and depressing its share price but could also help Clover maintain its listing on the NASDAQ. The company had been trading at under $1 from June 20 to July 14 but has been trading over $1 since Monday.
The company, which offers Medicare Advantage plans, isn't out of the woods financially, however. In the first quarter, it reported revenue of $527.8 million, down 39.6% year over year and a net loss of $72.6 million compared to a net loss of $75.5 million in the same period last year.
Clover has drawn some interest from investors because of Clover Assistant, an artificial intelligence (AI) system designed to simplify the claims process for providers and patients.
