UnitedHealth Group’s shares surged in pre-market trading Friday following the disclosure that Berkshire Hathaway has taken a significant stake in the health insurance giant.
According to a regulatory filing, Berkshire Hathaway purchased approximately 5 million shares of UnitedHealth in the previous quarter, representing an investment valued at roughly $1.57 billion. The move draws attention, as investors often monitor Berkshire’s filings closely to gauge Warren Buffett’s investment decisions.
Buffett, who is expected to step down as Berkshire Hathaway CEO by the end of the year after six decades at the helm, oversees a conglomerate with diverse holdings. The company owns major insurance and transportation businesses, including Geico and BNSF Railway, as well as well-known consumer brands like See’s Candy and Dairy Queen. While Buffett is the most recognized figure, investment decisions are also managed by Ted Weschler and Todd Combs, who handle smaller portfolios, with Combs additionally serving as CEO of Geico.
UnitedHealth has faced a series of operational and regulatory challenges. Last month, the company confirmed it was cooperating with federal investigations—both civil and criminal—related to its Medicare business. UnitedHealth proactively contacted the Department of Justice after media reports indicated scrutiny over aspects of its operations.
Earlier in the year, media sources reported that federal officials were investigating the company’s Medicare Advantage plans, focusing on billing practices that could influence payments. UnitedHealthcare, the company’s largest division, manages coverage for more than 8 million Medicare Advantage members, and its performance has been affected by higher care utilization and rate adjustments.
In addition to health insurance, UnitedHealth operates Optum, a business that provides technology and care services. The company’s recent challenges have also included leadership upheavals. In December, CEO Brian Thompson was tragically killed, while in April and May, the company revised its financial forecasts due to rising medical costs among new Medicare Advantage members, leading to further stock volatility. Former CEO Andrew Witty resigned amid these developments.
Despite these hurdles, the announcement of Berkshire Hathaway’s investment sent UnitedHealth shares up more than 12% in pre-market trading on Friday. However, the stock remains down roughly 50% over the past year, reflecting the combination of regulatory scrutiny, operational pressures, and market sentiment
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