UnitedHealth Group Stock Surges 15.14% in Two Days, Third Highest Trading Volume Amidst Scrutiny

On May 19, 2025, UnitedHealth Group (UNH) saw a significant surge in its stock price, rising by 8.21% over the past two days, with a total increase of 15.14%. The company's trading volume reached $191.02 billion, making it the third highest in the market for the day.

UnitedHealth Group has been under intense scrutiny following a report by The Wall Street Journal on May 14, 2025, which revealed that the company is under criminal investigation by the Justice Department for possible Medicare fraud. This investigation has been active since at least last summer and is focusing on the company's Medicare Advantage business practices. The news came just one day after UnitedHealth announced the replacement of its CEO, Andrew Witty, with Stephen Hemsley, the current chairman and former CEO of UnitedHealth, and the retraction of its 2025 guidance.

Adding to its challenges, UnitedHealth is facing a securities class action lawsuit in the Southern District of New York. The lawsuit, Faller v. UnitedHealth Group Inc., alleges that the company misled investors regarding its earnings projections for fiscal year 2025. Initially, UnitedHealth projected net earnings per share (EPS) of $28.15 to $28.65 and adjusted EPS of $29.50 to $30.00. However, on April 17, 2025, the company sharply reduced its forecast to a net EPS of $24.65 to $25.15 and an adjusted EPS of $26.00 to $26.50, citing unexpectedly higher care utilization among its Medicare Advantage members. This revision led to a significant decline in UnitedHealth's market value.

The lawsuit further contends that UnitedHealth's alleged strategy to deny health coverage to inflate profits and its stock price drew increased scrutiny from regulators and lawmakers, fueled public discontent, and contributed to the December 4, 2024, murder of Brian Thompson, the CEO of UnitedHealthcare, UnitedHealth's insurance division. The complaint highlights the intense public reaction to Mr. Thompson's death, suggesting widespread animosity towards the company's practices. The lawsuit seeks to represent investors who purchased or acquired UnitedHealth Group stock between December 3, 2024, and May 13, 2025, and alleges violations of federal securities laws.

Despite these challenges, UnitedHealth Group's stock price has shown resilience, with a significant increase in the past two days. The company's Medicare Advantage business remains a key driver of its growth, and industry experts believe that the sector will continue to thrive. UnitedHealth's recent stock purchases by its director, Kristen Gil, who bought 3,700 shares, also indicate confidence in the company's future prospects.