What happened Shares of Clover Health Investments (NASDAQ: CLOV) surged Friday on talk of a possible short squeeze. By the close of trading, the Medicare Advantage plan provider's stock price was up 20% after rising as much as 36% earlier in the day. So what Billionaire investor Chamath Palihapitiya helped take Clover Health public in January through a special purpose acquisition company (SPAC). Palihapitiya has called the healthcare technology company "the greatest growth opportunity" he's ever seen. Yet in February, noted short-seller Hindenburg Research accused Clover Health of using misleading marketing practices and failing to disclose a federal investigation. Its shares went on to lose nearly half their value following Hindenburg's report. The bulls and bears are battling over Clover Health's stock. Image source: Getty Images. Many investors apparently took Hindenburg's claims as a reason to short -- or bet against -- Clover Health's stock. Market data analytics company S3 Partners said this week that short interest in Clover Health had approached 145%. Traders on social media sites like Reddit and Twitter took this as a sign that Clover Health could make for an excellent short-squeeze target, similar to GameStop earlier this year. Now what By coordinating their purchases in heavily shorted stocks, traders hope to drive up their prices and force short-sellers to exit their positions. For short-sellers to do so, they must buy back the shares they shorted, which can accelerate the upward move in prices -- at least temporarily. But when a short squeeze inevitably ends, traders who bought later in the rally can suffer gruesome losses as the stock's price sinks. And as for Clover Health's reportedly high short interest, Hindenburg highlighted that the data used to calculate the percentage of its shares that are held short was incorrect and will soon be corrected. Thus, any potential short squeeze in Clover Health may be particularly short-lived. 10 stocks we like better than Clover Health InvestmentsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Clover Health Investments wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of February 24, 2021 Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Clover Health Investments and Twitter. The Motley Fool has a disclosure policy.Source