Shares of WellCare Health Plans, Inc. (NYSE:WCG) were trading down over an FBI raid at the company’s Tampa, Florida headquarters. Unfortunately there aren’t any details as to what it was about. Obviously it’s not anything favorable, that much you can count on. The company is a manged care services company that works for government sponsored healthcare programs, such as Medicaid and Medicare; and offers family health plans.
It also offers:
- Temporary Assistance to Needy Families (TANF) programs,
- Supplemental Security Income (SSI) programs,
- State Children’s Health Insurance programs (S-CHIP),
- Family Health Plus programs (FHP).
At the end of last year it had roughly 2.258 million members through a network of 50,000 physicians, 600 hospitals, and approximately 15,000 other ancillary providers and skilled nursing facilities. Unfortunately there is just not any information available
Shares had fallen 5.5% to $115.50 before the stock halt, and the 52-week trading range is $55.56 to $128.42. With a P/E north of 25 and with it much closer to highs, if the news is as bad as other insurance and hospital system raids of the last few years it could be a really bad day for holders. This has(had) just under a $5 Billion market cap.
It has been quite some time since we’ve seen FBI and insurance companies have the FBI conduct raids on headquarters, and this is a reminder of one of the risk aspects of these businesses. We’d expect a comment out of the company soon.
Jon C. Ogg
October 24, 2007