Wall Street Breakfast
Medicare probe hits UnitedHealth shares
May 15, 2025
UnitedHealth is under investigation by the Department of Justice for potential Medicare fraud, causing a dip in its stock prices. In corporate news, Dick's Sporting Goods is close to acquiring Foot Locker, which could represent a savvy move if they negotiate well. Warren Buffett shares his thoughts on passing the torch at Berkshire Hathaway, stirring interest in leadership changes. Meanwhile, Apple faces pressure from Trump regarding its manufacturing decisions in India, while China's easing of rare earth mineral exports to the U.S. has implications for tech industries.
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Quick takeaways
- UnitedHealth is facing a Department of Justice investigation for potential Medicare fraud, leading to an 8% drop in its stock price.
- Foot Locker's shares soared over 68% amid acquisition talks with Dick's Sporting Goods, representing a strategic opportunity for brand expansion.
Deep dives
DOJ Investigation into UnitedHealth Group
UnitedHealth Group is currently undergoing an investigation by the Department of Justice, focusing on potential Medicare fraud related to its Medicare Advantage business. The health care fraud unit of the DOJ is looking into allegations that may involve kickbacks, resulting in inflated payments for Medicare services. Following the news of the investigation, UnitedHealth's stock experienced a significant decline, dropping 8 percent in after-hours trading and continuing to struggle in pre-market activity. This scrutiny adds to the challenges faced by the company amid a recent unexpected CEO change and a lawsuit from shareholders over perceived mismanagement during a crisis.
