UnitedHealth Group (UNH) shares plummeted 5.19% in after-hours trading on Wednesday, following reports that the healthcare giant is under criminal investigation for possible Medicare fraud. This latest setback comes on the heels of a tumultuous period for the company, which has seen its stock price drop significantly in recent weeks.
According to The Wall Street Journal, UnitedHealth Group is facing a criminal probe related to potential Medicare fraud. This investigation adds to the company's mounting challenges, which include a recent CEO change, suspended 2025 financial guidance, and concerns over rising medical costs in its Medicare Advantage business.
The after-hours plunge follows a day of attempted recovery for UnitedHealth's stock, which had risen slightly during regular trading hours after Tuesday's 18% crash. The company's troubles began in April when it significantly cut back its guidance, leading to the biggest 2-day selloff in shares in 27 years. On Tuesday, UnitedHealth announced the sudden departure of CEO Andrew Witty and the return of former CEO Stephen Hemsley to the top role, while also suspending its 2025 outlook due to surging medical costs.
Analysts have responded to the company's recent woes by downgrading the stock and slashing price targets. The uncertainty surrounding UnitedHealth's future performance and the potential fallout from the criminal investigation are likely to keep pressure on the stock in the near term. Investors will be closely watching for any further developments in the investigation and the company's efforts to address its operational challenges.
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