UnitedHealth Group (UNH) stock jumped early Friday after Warren Buffett's Berkshire Hathaway (BRK-A, BRK-B) revealed Thursday that it purchased 5 million shares last quarter.
The insurance giant has suffered multiple setbacks in the past couple of years. With earnings misses piling on top of all that, the stock has been under constant pressure and is down more than 45% year to date.
On the news of Berkshire's share purchase, however, the stock popped nearly 10% in early trading Friday.
The last time Berkshire held a stake in the company was when Stephen Hemsley was CEO, between 2006 and 2017. Hemlsey returned to the role after former CEO Andrew Witty stepped down in May following a year of compounding headwinds.
Last year, the company suffered one of the biggest cyberattacks in history on one of its subsidiaries, Change Healthcare, which manages payments, creating havoc for health providers for months. The US Health and Human Services Department (HHS) had to step in and assist in getting payments flowing again.
Read more about UnitedHealth's stock moves and today's market action.
The company subsequently announced a larger-than-expected impact from the attack in mid-2024, dragging down major indexes. At the end of the year, during the annual shareholders' meeting in New York City, insurance CEO Brian Thompson was shot to death.
The company's struggles didn't end there. Public backlash against the industry swelled in the aftermath, and the entire insurance industry was forced to address the issue of denied claims. In April this year, the company's stock crashed after an earnings miss shocked the Street.
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Hemsley took over in May and, in the latest earnings call, addressed the company's missteps and the higher cost environment that it did not adjust to in time.
“Beyond the environmental factors that are affecting the entire sector and more specifically to us, we have made pricing and operational mistakes as well as others,” he said on the call.
UnitedHealth's stock pop also helped boost the Dow (DJI), which was up about a half percent in early trading. Previously, UnitedHealth's losses dragged the Dow. In May, UnitedHealth was attributed with 88% of the Dow's decline year to date.
Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, provider services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee as AnjKhem on social media platforms X, LinkedIn, and Bluesky @AnjKhem.
