Delay, deny, and defend: Public outrage at health insurance companies and stock market debacle

Abstract

This study investigates the stock market’s response to the assassination of UnitedHealthcare’s CEO, focusing on the cumulative abnormal returns (CARs) of publicly listed U.S. insurance firms. Using topic modeling on 59,644 Reddit comments, we identify and analyze key public narratives surrounding the incident, revealing nine topics including the themes of (1) public anger at the profit-driven practices of the insurance industry, (2) support for the shooter, criticism of the CEO, and (3) frustrations over healthcare costs and systemic inefficiencies. Sentiment analysis further shows that discussions are overwhelmingly negative, reflecting widespread dissatisfaction. Empirical analysis demonstrates that corporate characteristics such as profit, revenue growth, and media attention significantly amplify negative CARs, highlighting the market’s sensitivity to perceptions of corporate profit and glamour. High executive compensation, particularly for CEOs, is also associated with more severe stock price declines, suggesting that leadership privileges intensify investor concerns. However, no evidence links CEO narcissism to negative stock impacts, indicating that public focus is more on systemic business practices than individual attitudes. Firms in the ‘Hospital & Medical Service Plans’ segment, including UnitedHealthcare and its peers, experienced the steepest declines immediately after the incident, reflecting heightened public discontent with companies closely tied to essential healthcare services. These findings support the views of ‘social banditry theory and investor sentiment’ and contribute to the broader debate between ‘shareholder vs. stakeholder value maximization’, emphasizing the risks of overlooking societal expectations.