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UnitedHealth Group (UNH) stock fell as much as 17% early Thursday, reaching its lowest levels in five years and marking a more than 50% drop over the last month as negative headlines for the insurance giant continue to add up.
Thursday's plunge follows a new report in The Wall Street Journal released late Wednesday that said the company is facing a criminal investigation related to possible Medicare fraud.
In a statement on Wednesday, UnitedHealth called the story "deeply irresponsible," referring to a "supposed" investigation. UnitedHealth added in its statement that it stands by the integrity of its Medicare Advantage program.
On Tuesday, the company announced its former CEO, Stephen Hemsley, would replace Andrew Witty, who had been CEO since 2021, in a surprise move that sent shares of the company down nearly 20%. The company also pulled its 2025 forecast in making the executive change.
Wall Street analysts said following the leadership and forecast announcements, the company is unlikely to receive the benefit of the doubt from investors until some semblance of stability can be offered.
Thursday's sharp reaction to the latest negative developments for the company is another case in point.
As Yahoo Finance's Anjalee Khemlani noted earlier this week, the company's challenges are many: increased costs, political pressure over its size, and scrutiny by the Federal Trade Commission and Department of Justice are all weighing on the business.
Congress has also put the spotlight on its market power as a large pharmacy benefits manager (PBM). Furthermore, the company has faced questions about its use of artificial intelligence in claims processing and a large cybersecurity attack on its Change Healthcare subsidiary.
The company also suffered significant public backlash following the killing of former executive Brian Thompson in December, and investors are suing the company for downplaying the impact of that tragedy. Questions about claim denials and fury about overall insurance industry practices were directed at UnitedHealthcare, UnitedHealth Group's health insurance business, in the aftermath of the killing.
Correction: A previous version of this article misspelled the name of UnitedHealth's former CEO, Stephen Hemsley. We regret the error.
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