While the deluge of recent negative news has made it apparent to all that UnitedHealth (NYSE: UNH) stock is in dire straits, Bill Ackman saw the writing on the wall months in advance.
As early as February, the billionaire hedge fund manager published an X post explaining he had assumed the healthcare company was guilty of, at the very least, fraud, even before the Department of Justice (DoJ) announced its investigation.
According to Ackman, UnitedHealth’s aggressive posturing against critics was a tell-tale sign that something was rotten in its business, while the DoJ probe confirmed, as he put it, that ‘when you find two cockroaches, it is almost a certainty that there are many more.’
Within the same X post, the billionaire also opined that UNH’s market capitalization ‘makes no sense,’ and that many more whistleblowers are likely to come forward. At the time, UnitedHealth boasted a valuation of $430 billion despite already suffering a major drop following the fatal shooting of UnitedHealthcare CEO Brian Thompson in late 2024.
At press time, the healthcare giant’s market capitalization stands at $272 billion.
What is behind UNH stock’s latest plummet
By May 19, many of Bill Ackman’s instincts proved correct. UnitedHealth equity took a beating after the unexpected departure of its long-standing CEO, Andrew Witty, and the firm’s decision to pull its 2025 outlook.
The situation was exacerbated soon after, as the Wall Street Journal alleged that the company was under criminal investigation for fraud by the DoJ. While UnitedHealth denied the claims, investors swiftly began jumping ship.
UNH stock crashed 35% since Ackman’s warning
Following the cumulative May news, UNH stock is 40.15% down year-to-date (YTD) and even broke its previous record as a Dow 30 company with the biggest recorded monthly collapse that it set during the 1998 sell-off. It is also 35.53% below its price at the time of Ackman’s February 21 tweet.
UnitedHealth shares’ performance on Monday morning, however, indicates that the equity may have bottomed for the time being, as it is, with its press time price of $301.97, up 3.45% in the daily chart.
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