The stock of the healthcare giant UnitedHealth Group (NYSE: UNH) reacted positively during the December 9 session to the news that law enforcement arrested a suspect in the fatal shooting of Brian Thompson, the CEO of the company’s medical insurance division.
Specifically, UNH shares rallied 2.39% on Monday and closed at $560.62, but the upside in the extended session proved minimal, as by press time on December 10, they had gained another 0.07% to reach its pre-market price of $561.01
The upward momentum likely stems from the expected reduction in pressure on UnitedHealth and other similar companies, which have been noted for reversing some of their most controversial policies in the wake of the murder.
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Why UNH stock rally was limited despite shooter arrest
Still, the limited extended session gain can be explained by the fact that the shooting itself did little to impact the stock. The majority of the downside came after the revelation that the company’s executives – facing legal pressure – allegedly elected to engage in insider selling instead of properly alerting the shareholders and would-be investors.
Indeed, even with the arrest of the alleged shooter, UnitedHealth remains under scrutiny both due to its general unpopularity stemming from an exceptionally high rejection rate and from dubious policies such as the alleged use of artificial intelligence (AI) to deny insurance claims.
Furthermore, the netizens’ reaction to the killing strongly implies the likely continued struggles for UnitedHealth and other insurance companies.
In the days between the shooting and the arrest, social media was filled with posts either directly or indirectly praising the shooter, with some even disseminating what can be described as their CEO assassination wish lists.
Furthermore, the police at one point reported that the public’s unwillingness to aid the investigation slowed down the process.
Nonetheless, the probable murderer – identified as one Luigi Mangione – was arrested thanks to the bystanders alerting the police in a Pennsylvania McDonald’s (NYSE: MCD) based on the surveillance camera footage disseminated by the media.
UNH stock’s long-term performance remains largely unaffected
Finally, despite the recent turmoil, it is worth pointing out that the shooting and the other allegations that gained prominence in its wake had little impact on the overall performance of UNH shares.
In fact, even after the December downturn – a downturn that featured an 8.90% drop in the 7-day chart – UnitedHealth stock remains 4.18% in the green year-to-date (YTD).
Additionally, the other legal issues and the antitrust actions initiated by the Department of Justice (DoJ) arguably had a greater impact as UNH stock is a full 10.34% below its November 11 high of $625.25. The latest federal lawsuit against the healthcare giant was announced on November 12.
Featured image via Shutterstock
