A 17-year-old Wall Street Bets enthusiast poured nearly all of his savings into Chamath Palihapitiya-backed Clover Health - and now stands to lose it all as the stock struggles

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A 17-year-old Wall Street Bets enthusiast poured nearly all of his savings into Chamath Palihapitiya-backed Clover Health - and now stands to lose it all as the stock struggles
Chamath Palihapitiya, Founder and CEO of Social Capital LP.Mike Windle/Getty Images
  • A 17-year-old boy from Michigan stands to lose all his money after going all in with Clover, as reported by Bloomberg.
  • He followed the advice of Chamath Palihapitiya, who backs the company.
  • As of Thursday, Clover's stock is still suffering, trading at $7.24 to its lowest since it debuted.

Billionaire investor Chamath Palihapitiya, dubbed as SPAC King by some, has dished out plenty of investing advice that has earned him a loyal following of retail traders.

One of those is 17-year-old Arnav Naik who lives in Troy, Michigan.

As Bloomberg reported, Naik got into SPACs, or special purpose acquisition companies, after his high school transitioned to remote learning during the pandemic.

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Naik said he starting reading through Reddit's famous Wall Street Bets forum where he picked up how to trade stock options. He then put in $5,000 from his savings, which grew to $35,000 in just six months thanks to an electric truck SPAC and GameStop.

But when he saw Palihapitiya tweet about Clover Health Investments, an insurance startup, Naik doubled down.

In January, he put almost all his money into Clover call options, telling himself that if the stock went up, his investment could balloon to $130,000.

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"When you slap a name like 'Chamath' on there, it has a lot of potential to rocket up, like how Tesla did with Elon," he told Bloomberg. "He's going to join the WallStreetBets meme god pantheon."

The problem is, Clover wasn't doing very well.

In February, short-seller Hindenburg Research published a report that accused Clover of misleading its investors, customers, and the federal government.

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Shares of Clover, which went public in January in a $3.7 billion SPAC deal led by Palihapitiya, plummeted in the wake of the report.

As a result, Naik lost almost all his money, Bloomberg reported, and unless Clover rebounds, the teenager will see his investment recover.

Yet his faith in the billionaire investor remains unshaken. He even said he wants to become an investment banker in the future.

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"He's doing the best he can," he told Bloomberg. "It'll keep growing. I really think I'll get a huge return."

Unlike Naik, Palihapitiya and other hedge funds made millions from betting on Clover - and have already moved on.

As of Thursday, Clover's stock is trading at $7.24 to its lowest since it debuted.

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Read more: Bank of America says Wall Street stock pickers remain vulnerable to an inflation shock - and recommends 2 trades for protection as prices rise

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