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Shares of UnitedHealth Group plummeted double-digits for a second time this week on Thursday amid reports that the company is being investigated for possible Medicare fraud.
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Thursday's decline put the stock on track to close down more than 50% over the past month, its worst such stretch since going public in 1984.
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Shares sank more than 20% in a day last month when the company lowered its full-year profit outlook; they tumbled a further 18% on Tuesday when it withdrew its outlook entirely and announced the sudden departure of its CEO.
UnitedHealth Group (UNH) stock was on track to have its worst monthlong stretch ever on Thursday as reports of a DOJ criminal investigation sent shares plummeting for the second time this week.
UnitedHealth shares tumbled to a five-year low on Thursday after The Wall Street Journal reported the Justice Department is investigating the health-care giant for possible Medicare fraud. The investigation reportedly has been underway since at least last summer.
Thursday’s losses put the stock down more than 50% since mid-April. Without a midday rebound, the stock will notch its worst one-month decline on record.
The last time shares fell nearly that much in a comparable period was between mid-July and mid-August 1998, when the stock slumped about 49%. That decline came after the company took an unexpected $900 million charge that ultimately torpedoed its pending merger with competitor Humana (HUM).
Investigation News Extends Dismal Stretch for UnitedHealth
Thursday's Wall Street Journal report extends a dismal stretch for UnitedHealth and its shareholders. Shares plummeted 22% in a day last month when the company lowered its full-year profit forecast, citing unexpected costs related to Medicare Advantage and Optum Health insurance plans. It was the stock’s fourth-worst daily performance since going public in 1984.
Shares took another major hit on Tuesday, falling nearly 18% when the company announced CEO Andrew Witty was stepping down after four years in the role. The company also withdrew its full-year guidance entirely for the same reasons outlined last month.
UnitedHealth’s stock has singlehandedly dragged the Dow into negative territory on multiple occasions over the past month. As recently as April 16, it was the most expensive, and thus the most influential, stock in the blue-chip index. But UnitedHealth’s weight within the Dow has slumped along with its stock price. With a share price of about $266 recently Thursday, it was ranked 16th.
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