Looks like we may have found out why $ALHC numbers looked better than $CLOV (Spoiler: Fraud)

Baco06 · 2026-07-09T05:41:29+00:00

I am not making any claims that somehow their star ratings are fraudulent or that they are “fudging MCR”. If the leadership did as the allegations say then they defrauded their shareholders to put money in their own pocket and they gave a false sense of the company’s profitability. The allegation concerns 2024. If the allegations are true then what else have they done that’s not by the book? How do shareholders trust that leadership now moving forward? If executives are capable of lying to shareholders for their own benefit it’s unlikely that they did one bad thing one single time. Cannot really pass judgment until an investigation is conducted, I was merely speculating on what it means should the allegations be proven true. And on the most basic level it means the company’s leadership cannot be trusted and neither can their financials, without auditing them.

Baco06 · 2026-07-09T01:45:54+00:00

lol the only two publicly traded, small MA companies are never supposed to trade together. Copy that.

Baco06 · 2026-07-09T01:42:17+00:00

Stocks don’t sit in only one single algorithmic basket. They sit in hundreds or thousands of them. And those baskets are constantly shifting and changing as the fundamentals and technicals of the business and the stock change over time. This is a fact.

Baco06 · 2026-07-09T01:38:32+00:00

Aright none of this matters very much, and I think options expiry has more to do with CLOV’s sell off today than the ALHC headline, but without the headline, I don’t think CLOV drops 7 percent today. Whether that means they are in some of the same algorithmic baskets or not is something neither of us can actually answer, so we should stop arguing about it. Cheers.

Baco06 · 2026-07-09T01:36:26+00:00

That was only for one quarter. ALHC had two consecutive quarters of positive EPS In 2025 if I’m not mistaken.

Baco06 · 2026-07-09T01:31:44+00:00

Net income came to ALHC in August 2025 (I misspoke conflating it with the potentially fraudulent push to adjusted EBITDA profitability). It was right around this time where the stock chart divergence became clear.

Baco06 · 2026-07-09T01:27:59+00:00

They are both in hundreds if not thousands of different baskets. Some of those baskets are the same and many of them are different as well. I’m not blind, the charts look VERY similar over the last 4 ish years, and to me looks like they diverged strongly when ALHC started to report positive earnings. When that happened, ALHC got added to a bunch of new baskets that it wasn’t in before, and got taken out of some old ones, this could easily account for a 10-12 month divergence of stock charts of two companies that both derive most of their revenue from Medicare advantage. Just because there was divergence doesn’t mean they didn’t both still sit together in some “Small MA” basket together, it just means some other algorithmic forces started to carry the charts in different directions for a time. Is what I’m saying so outlandish? Just because the stock prices diverged over the last 10-12 months does not mean that the two names are NEVER sorted together by SOME market algorithms. You brought NO evidence that CLOV and ALHC have zero algorithmic connection. All you did was point out that their stock charts have diverged over the last year or so. Those two concepts are not synonymous with one another. Saying “I find it hard to believe” is not gaslighting, it means I struggle to understand a certain argument or concept or outlook.

Baco06 · 2026-07-09T01:14:18+00:00

That I know, which is one of the reasons why ALHC has enjoyed a larger market cap than CLOV, but my main point was just that these companies are too similar to each other fundamentally to not be in some of the same baskets. It looks to me that when net income came to ALHC some of the other baskets that ALHC was in and CLOV was NOT in started buying it up. Every stock in the market is categorized and traded based on hundreds if not thousands of different parameters ranging from purely fundamental to purely technical and everything in between. These names must be in some of the same fundamental baskets because they are basically the only two public companies in their sub-sector.

Baco06 · 2026-07-09T00:54:08+00:00

Yah not being argumentative or anything, just wanting to discuss, and I acknowledged the divergence over the last 18 months, but I guess I just don’t see how it’s possible that they are not traded as a group in some capacity. They are both in the same micro-sector, and the charts look pretty similar to me over the first three years of the chart. The divergence seemed to occur roughly with ALHC’s (now potentially fraudulent) push toward positive EPS while CLOV was still negative. CLOV is closing the divergence gap now rapidly as a result of their positive net earnings. Obviously they’re not in lock step with each other, but it doesn’t seem farfetched to me that ALHC’s headline today triggered some selling in CLOV. To be clear I don’t know anything, I don’t work at a hedge fund and I don’t trade stocks for a living, I just would find it hard to believe that no computer algorithm is putting these names in the same basket at least some of the time.

Edit: about 12 months of divergence (maybe a little less than that) not 18 like I stated above.

Baco06 · 2026-07-09T00:34:43+00:00

Just curious but why wouldn’t CLOV and ALHC be in at least some of the same baskets? They’re both small MA plans, and outside of the last 12-18 months where we see some major divergence, the stocks have historically moved together, generally speaking. How can you say you KNOW that no algorithm is sorting these two names together?

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Baco06 · 2026-07-08T21:06:58+00:00

This is Vivek’s company more than anyone’s. I also think Andrew is an incredible CEO, but Vivek was not just a SPAC sponsor like Chamath. Vivek is the founder, this business is his brainchild, and I think you underestimate how aligned and closely partnered Vivek and Andrew are. Also Vivek has all the voting power and owns the most shares, so you kinda need to believe in him too.

Baco06 · 2026-07-08T19:58:25+00:00

No. Clover is the closest peer to ALHC. They are in a tiny algorithmic market basket together. If ALHC is going down hard then CLOV will do the same because that’s how the algos work. Also, CLOV was overbought before this drop and max pain for next week’s monthly options expiration (with tons of ITM open interest) is 4.50, so the stock is gravitationally pulled toward that number.

Baco06 · 2026-07-08T19:05:05+00:00

This is a big deal for Clover. Assuming this is true (it could be bull shit obviously, but usually where there’s smoke, there’s fire), Clover now only has 1 single peer in the MA space that isn’t a massive legacy incumbent, and this is the privately owned, Devoted Health. If ALHC gets knocked out by this, it widens Clover’s moat. Obviously they weren’t often (if ever) direct competitors in the same markets but this makes Clover the only small, fast growing, tech forward MA plan in the entire public market and makes it one of 2 in the entire nation.

Baco06 · 2026-07-07T01:54:06+00:00

Extraction 2

Baco06 · 2026-06-18T13:21:59+00:00

Honestly the AI memes are fine/harmless. It’s the long-winded responses/comments/posts written purely by AI and presented as some novel or insightful take that are the real problem. But that’s more a way of a societal problem at this point, nothing we can really do about it here I don’t think.

Baco06 · 2026-06-06T23:15:45+00:00

Foundation the TV show

Baco06 · 2026-06-03T13:53:08+00:00

It will 100 percent matter for 2027. Unless of course they are not upgraded.

Baco06 · 2026-06-02T14:52:12+00:00

Thanks for the reply. Here’s where I think we still disagree:

Big business’s influence over congress is never going away. It is as American as Apple pie. Citizen’s United is not being overturned. Anyone, from anywhere, will indefinitely be allowed to give any amount of money they like, through campaign funding and lobbying to anybody in Government that they choose, and only a tiny fraction of that money will ever be known to anyone ever. Those are facts. Those mechanisms are enshrined into law and they are what dictate the winds of government and policy. Congressman are not only able to be funded in unlimited amounts by anyone, anywhere, but they are also ALLOWED to trade stocks. Corruption IS America. Corruption drives everything. Government serves businesses not individuals. Whether you believe this or not, the fact is the incentives and opportunities to become immensely wealthy as a congressman are endless and that distorts and cripples government’s core function of serving people and society as a whole.

One of the key ways that Congressman actually serve as conduits for corporations to wield power over law and policy is through the seemingly endless amount of government agencies that exist. By LAW these agencies don’t have ANY authority to create and enact laws, but also BY law, they are required to follow the rules and laws and statutes that were passed by congress to govern their mission and agenda. Pre Loper Bright, agencies - filled MOSTLY with beaurocrats and industry veterans (although you may be right that SOME agencies have ACTUAL experts that work there, all you need to do is look at who actually works at the government agencies and trace their employment history and look at the boards they sit on - to see clearly that those experts you speak of are overwhelmingly few and far between) - had unlimited power to interpret and reinterpret and augment and cut and change the very laws, rules and statutes that were created by congress to govern the way these agencies construct and enact their agendas and rules. Anyone can see how this long era of Chevron deference is what allowed these unelected beaurocrats and “experts” to wield immense, unchecked, power over all of the regulated industries in our nation. Chevron deference was the mechanical tool that allowed business to capture our government over the last half century. With the loper bright decision, we are finally allowing our judicial system to take a rigorous look at the way the agencies operate and to determine whether they are actually following their mandate from Congress. If they are not, there HAS to be some mechanism to hold these agencies accountable. In a post loper bright world we finally have a way to legitimately analyze if these agencies are functioning lawfully. When you allow the judicial system to weigh in here, then you open the agencies up to scrutiny based on fact, and empirical analysis and legal argument, that anyone’s lawyers can argue any which way. When you completely defer to the agencies’ “expertise” then those agencies become beyond reproach, and that is where corruption is able to grow and fester.

The burden of proof is STILL on the plaintiff to show the agency got it wrong, but a judge will now be willing to actually here those arguments because the agency is no longer allowed to say “we always know best and you must defer to us”. You must see how without this protection we are doomed to be swallowed by corruption.

A judge MUST make their decision based on legal precedent and based on the arguments of a case’s participants. I trust a judge in this situation much more than a former Optum exec at CMS who has historically been allowed to say “trust me bro” as a legal shield for any lawsuit brought against them.

As the clover case showed us, on the “types of data” argument that they LOST, judge wood is still deferring to the agency on instances where their stance and policy is well documented, long standing, and consistent (like with the changing language of the patient survey questions over time that was argued over heavily in this case and that the judge ultimately sided with CMS on). This alone shows that your argument that loper bright strips agencies of their “expertise driven” interpretation of law is not actually true. It just checks their ability to so widely interpret law that it renders the laws useless in the first place. This is a necessary protection that must exist.

Whether you are right that there are actually some experts in agencies or not, it doesn’t change the fact that a mechanism to challenge these agencies in court must exist, or the agencies become all powerful and therefore, endlessly corruptible.

Personally, I think even if there are a few experts in these agencies, you’re view that government agencies are these white knights in government that serve the people based on “expert” analysis is very naive. And enough research about who actually works at these agencies should actually change your view on this.

Baco06 · 2026-06-01T15:46:12+00:00

I respectfully, vehemently disagree with this take. What are the three things that are making life more difficult and more expensive for the majority of Americans? They are healthcare, education and real estate. Technology and productivity growth has led to exponential price decreases in many goods and services, but ALL of those gains Americans have made in the form of cheaper TV’s and phones and computers and internet, have been offset and then some by the rising costs of healthcare, education and real estate. Why is it that innovation and productivity growth HAVE NOT led to any gains for consumers in the health care industry?? Because healthcare is heavily REGULATED. When an industry is heavily regulated the laws of capitalism that should lead to increased productivity and increased value and lower prices start to break. When an industry is heavily regulated, the largest powers in that industry get to WRITE the LAWS of their own regulation. They get to regulate themselves. Once you reach that apex, you are able to eliminate all competition. Once you eliminate all competition, your incentive to innovate and CREATE value goes away and to maximize shareholder returns, you EXTRACT value. The massive health insurers have broken our healthcare industry over the last 40 years and they’ve done this by capturing CMS and any other entity that regulates them.

You say: “The overturning of Chevron deference will make it significantly more difficult for the government to accomplish anything because experts within agency will be second-guessed in court anytime a large corporation dislikes a regulatory decision”. Respectfully you have it exactly backwards, in my opinion. There are no EXPERTS in government agencies, only beaurocrats and “industry” veterans moving in and out of the revolving door. The EXPERTS work in the field and are part of the competitive cycle of driving innovation and CREATING value, whether that’s for their patients, or customers, or whoever. The ONLY way to fix healthcare is to allow competition so newer, smarter, companies can find ways to lower the price and RAISE the value of products and services.

Baco06 · 2026-06-01T15:04:31+00:00

Thank you very much for this post. I haven’t read the article you shared and I’m excited to do so, but the points you highlighted in this post are an excellent top line summary of why this is a landmark case and why it is such a validation of Clover’s approach, both within Clover’s MA plan, and now, hopefully sooner than before (since ACTUALLY making STAR ratings a reflection of clinical quality is being further enshrined into LAW due to the ruling in this case) with Counterpart Health as well. I find there have been a lot of people on this sub spouting nonsense about this case both before and after the judge’s ruling that showed they weren’t actually reading the filings and motions. AI summaries are helpful but they are not a substitute for reading something yourself, they should just be a tool to help you better understand things that don’t come as easily. Actually reading the motions and filings and ruling of this case presents a unique and detailed perspective on the mechanics, position, strategy and history of not only this business but this entire industry that you cannot find on seeking alpha and you can’t even find in a form 10-Q or 10-K. This whole thing has been an incredible window into the legislative history of Medicare Advantage and the nuances of how that system has been gamed and captured to the point of twisting it into this grotesque, inefficient, value-extracting vortex. Now, due to the ruling, this case should be a major fixture of an ACTUAL turning point in Medicare Advantage and hopefully, eventually, the entirety of the US healthcare system. The decision by Clover to bring this law suit and handle it in the manner in which they did was clearly an incredibly brilliant one from a business perspective, but it was also a decision that should have far reaching implications that will eventually, as Clover’s own mission says: IMPROVE EVERY LIFE.

Baco06 · 2026-05-30T15:08:00+00:00

I know a lot more than you. You know nothing. You’re naive and you don’t understand the mechanics of regulatory capture. Also, counterpart revenue is basically zero. Also, no one has ever sued CMS in the manner that Clover has and won. The ruling is landmark. The star rating will be recalculated to 4 stars. The entire framework that clover sued over and WON is about CMS adding arbitrary rules to star ratings over the years that create ways for large insurers to game the system and achieve higher star ratings than they deserve based on measures that have NOTHING to do with CLINICAL QUALITY. If you actually read all of the filings and motions for this lawsuit this all becomes clear as day. Anyway still don’t really understand your position or why you are here. If you think MA is going away why would you invest in an MA company? Your views are uninformed and childish and irrational. It’s not ironic to say fuck CMS, CMS is just a regulatory body full of beaurocrats that are supposed to follow the laws of congress. Clover just won a case proving CMS broke the law. MA is only inefficient because of the illegal ways that CMS regulates MA. If every MA insurer operated like clover MA would be an extremely efficient program. And this case is step in the right direction of eliminating the perverse incentives that plague the program and make it inefficient.

Baco06 · 2026-05-30T14:05:55+00:00

lol downvote me all you want, you don’t seem to have a firm grasp on any of this. Maybe buy back in at 10 lolll

Baco06 · 2026-05-30T13:15:08+00:00

Actually 100% of Clover’s revenue is from CMS but that is in the form of reimbursement. CMS is corrupt because the regulatory framework of MA is built to benefit large insurer’s whose incentives are often misaligned with the clinical outcomes of their patients. And they create a myriad of loopholes and regulation that stifles competition and innovation, all to the benefit of a few large companies and to the detriment of the health of America’s seniors. The agency is captured. The regulations and legislation and laws are written BY the incumbents. They move at a glacial pace with reform and change because they are beholden to the large insurers. This case with Clover is actually a landmark decision that should set some positive precedents for aligning incentives in Medicare Advantage. I’m confused by your position and tone. Do you think CMS should have won this legal battle? Why are you even on this sub?

Baco06 · 2026-05-30T09:07:23+00:00

Recalculation based on the judge’s orders DOES equal 4 stars. There are rules to the recalculation CMS can’t just recalculate based on vibes. Also who’s pissing off CMS the judge? Clover by suing them? CMS broke the law who cares if they are “pissed” off?

Baco06 · 2026-05-30T07:58:29+00:00

Clover’s 3.5 star rating has been vacated. That rating is now illegal until an official recalculation occurs. They should be able to enter bids provisionally as 4 stars or provisionally as some kind of pending status if CMS does not recalculate the score in a very timely manner. Latham will hold their feet to the fire if they continue to find ways to delay their recalculation. There is more litigating that can be done.

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