UnitedHealth Under Scrutiny: DOJ Investigation Sends Shares Plummeting

UnitedHealth Group is facing a tumultuous period as its shares dropped dramatically by 13% following a Wall Street Journal report of a U.S. Department of Justice criminal investigation into possible Medicare fraud. This probe marks another setback for the healthcare giant, erasing over $300 billion from its market value since November's record highs.

The company's share value plummeted to $267 in midday trading, marking a near five-year low and the worst performance among Dow components this year. According to James Harlow from Novare Capital Management, investor confidence is dented further, given the new uncertainties clouding UnitedHealth's prospects.

In response to these developments, UnitedHealth has reinstated former CEO Stephen Hemsley to stabilize the helm amid growing governmental and public scrutiny of the health insurance sector. Despite these setbacks, analysts like Oppenheimer's Michael Wiederhorn remain optimistic about UnitedHealth's underlying strengths.

(With inputs from agencies.)