Standard & Poor's Rating Services downgraded WellCare's rating to a "B" from a "B+". Also the ratings are somewhat speculative, S&P's citations of much lower-than-expected statutory (capital) levels and an eroded margin due to a higher-than-expected medical loss ratio in Florida scared off investors. On Thursday, June 19th alone, shares fell 16% on the day. Source: MSN.com
Analysts expect that WellCare will not lose its contracts with Centers for Medicare and Medicaid Services despite the raid of FBI at its headquarters. However, the company may have to pay a large fine and it will affect the company’s chances of 2008 Medicare Advantage enrollment. The stock price of WellCare dropped 74.4 percent in the last three trading days, however, this news led to an increase in the price.
WellCare Health Plans Inc stock price plunged after federal and state agents launched a probe against the company. Agents searched the company’s headquarters in Florida. The company’s stock price fell by over 60 percent after the probe was launched.