Jim Cramer weighed in on the deepening crisis at one of America’s largest health insurers, which has lately found itself under intense scrutiny by the public, regulators, and the media.
What Happened: On Thursday, Cramer commented on UnitedHealth Group Inc.’s (NYSE:UNH) mounting troubles, zeroing in on the company’s public denial of a Wall Street Journal report about a federal criminal probe, on his X account.
“UnitedHealth is denying the WSJ story about them,” Cramer posted, before calling it “crucial,” and adding that “if convicted of criminal Medicare fraud, well, I don’t know…” regarding the stock. The CNBC host’s remarks reflect the uncertainty now gripping the markets and investors as scrutiny over UnitedHealth intensifies.
According to the WSJ report, the Justice Department’s criminal healthcare fraud division has been investigating UnitedHealth since at least last summer. The probe reportedly centers on billing practices tied to its Medicare Advantage program.
Besides this, the company is facing a barrage of issues, with several other lawsuits from customers, investors, and regulators, the abrupt exit of its CEO early this week, and a stock that has lost nearly half its value since April.
Why It Matters: The company pushed back against the report when Benzinga reached out to them on Thursday. Saying that they have “not been notified of any criminal investigation,” and that they stand by “the integrity of our Medicare Advantage business,” while calling WSJ’s reporting as “deeply irresponsible.”
UnitedHealth Group has faced a string of negative catalysts over the past couple of months, starting with the assassination of its subsidiary, UnitedHealthcare’s CEO, Brian Thompson, in December 2024. Since then, the company has faced lawsuits from investors, who claim the company hid the potential impact of this assassination.
Early this month, Cramer changed his stance on the stock, saying that he would “indeed start a position” in the stock at $400 a share after being “very negative” on it. The stock has since dropped 31% in the preceding two weeks.
Price Action: Shares of UnitedHealth were down 10.93% on Thursday, despite the company dismissing claims of a federal criminal investigation. It is up 1.29% after hours.
The stock fares poorly across most metrics in Benzinga’s Edge Stock Rankings. It’s competitor Humana Inc. (NYSE:HUM) does considerably better. You can find out more here.
Photo courtesy: katz / Shutterstock.com
Read More:
