The brutal murder of UnitedHealthcare’s CEO Brian Thompson has sent shockwaves through the business world, but the stock market remains eerily calm. Despite the brazen killing and subsequent manhunt, UnitedHealth Group Inc.’s shares opened at $611.02 and closed at $610.79 on Wednesday, a perfectly flat performance.
Thompson’s death was followed by a 5.2% drop in UnitedHealth’s value on Thursday, but the stock has since recovered, even surpassing its price from November 19, a week after the Justice Department sued the company to block its acquisition of a home health business.
The disconnect between the stock market and public perception is striking. Companies often rely on their CEOs to instill investor confidence, but UnitedHealthcare’s experience suggests that this is not as important as previously thought. The insurance giant made $16.4 billion in profit last year under Thompson’s leadership, despite facing allegations of predatory business practices.
Thompson’s murder was seen by some as a wake-up call for the company to address its negative publicity and improve its business practices. However, the stock market seems to have moved on, indicating that UnitedHealthcare has a robust system in place to extract money from the American healthcare system.
This phenomenon is not unique to UnitedHealthcare. A 2016 study found that stocks often rise after the sudden death of a CEO, suggesting that investors may view leadership as interchangeable. The contrast between the stock market’s response and public perception highlights a growing disconnect between Wall Street and Main Street.
Source: https://slate.com/technology/2024/12/unitedhealthcare-ceo-murder-reason-stock-prices-spike.html