Shares of UnitedHealth Group (UNH 6.18%) are plummeting this week. The company's stock is down 27.4% as of 12:29 p.m. ET. The collapse comes as the S&P 500 (^GSPC 0.70%) gained 4.7% and the Nasdaq-100 gained 6.4%.
It was reported this week that the troubled health insurance giant is facing a criminal investigation from the Department of Justice (DOJ). The report came just days after its CEO stepped down unexpectedly and the company pulled its full-year earnings guidance.
UnitedHealth is facing another DOJ probe
The Wall Street Journal reported late Wednesday that the DOJ's Health Care Fraud Unit is conducting a criminal investigation into the company for possible Medicare fraud. According to the report, the investigation has been ongoing since at least last summer.
This isn't the first, however. The DOJ is already investigating the company's Medicare unit in a civil case.
Image source: Getty Images.
UnitedHealth's CEO abruptly exits as the company pulls guidance
Earlier in the week, CEO Andrew Witty said he would step down for "personal reasons." On the same day, the company announced it was suspending its annual earnings forecast, citing rising medical costs.
In a call for investors, chairman and now CEO Stephen Hemsley apologized: "I'm deeply disappointed in and apologize for the performance setbacks we have encountered from both external and internal challenges." The suspension follows an already lowered forecast and earnings miss revealed in April.
All of this has shaken investor confidence in the healthcare giant, and its shares have plummeted 50% in just 23 trading days, marking the most severe drop for an S&P 100 company since Netflix fell 54% in May 2022, according to Dow Jones Market Data.
There are just too many issues facing UnitedHealth at the moment, and this once seemingly stable investment looks far from it at the moment. I would stay away from UnitedHealth stock.
