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Luke Kawa5/19/25

UnitedHealth surges after insiders step up with massive buys of the S&P 500’s worst performer

It seems like everything has been going wrong for UnitedHealth.

Heading into Monday’s session, it’s the worst performer in the S&P 500 this year, down more than 40%.

The company cut its 2025 outlook in mid-April after saying that heightened demand for Medicare Advantage plans were poised to be a larger-than-anticipated drag on earnings. Then it withdrew guidance completely (citing Medicare Advantage yet again) and announced the departure of CEO Andrew Witty for personal reasons last week. The hits didn’t stop coming, with reports later that same day of a Department of Justice investigation into the company for potential Medicare fraud.

But shares are surging in early trading to open the week, topping the S&P 500’s leaderboard.

As can often be the case when it seems like the world is against you, UnitedHealth’s remaining management team seems to be adopting an “us against the world” mentality and putting their money where their mouths are:

Board members Timothy Flynn and Dr. John Noseworthy (note: now that’s an aptronym!) bought 1,533 and 300 shares last Wednesday, respectively, before the stock cratered to fresh post-Covid lows on Thursday following reports of the DOJ investigation.
Kristen Gil, who also serves on UnitedHealth’s board, stepped into the breach on May 15 with a purchase of 3,700 shares. Though these shares are indirectly held in a trust, this was not part of a scheduled 10b5-1 trading plan.
And to close out the week, new CEO Stephen Hemsley bought about $25 million in company stock, while President and CFO John Rex added a cool $5 million to his holdings.

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The slow burn in software stocks is erupting into an all-out bonfire

Good results? Doesn’t matter. Good guidance? Doesn’t matter. Spending a ton to augment your business with AI? You’d better believe it doesn’t matter.

This earnings season, investors have decided that AI is enough of a long-term threat to the earnings power of software companies that the past three months or the next 12 are, at best, the calm before the storm. And heaven help management teams that didn’t offer strong results or a positive outlook.

The slow burn in software stocks has erupted into an all-out bonfire on Thursday, fueled by traders finding any excuse to sell Microsoft and ServiceNow after both reported robust quarterly results. The follow-through is weighing on the likes of Atlassian, Workday, Salesforce, Datadog, and Intuit. Put it all together and iShares Expanded Tech Software ETF is poised for its worst day since the Friday following the Rose Garden reciprocal tariff announcements in April 2025.

Here’s how an assortment of software companies have done on the session after reporting earnings:

Are there babies being thrown out with the bathwater here? Maybe. Probably, even!

But it likely won’t inspire too much confidence to learn that the last time the S&P 500 Software & Services industry group was down at least 20% over a 63-session stretch while the SPDR S&P 500 ETF was positive happened to be June 12, 2000.

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Joby plunges after announcing plans to raise $1 billion in convertible bonds and stock

Shares of air taxi maker Joby Aviation are down more than 14% in premarket trading after the company announced a $1 billion capital raise after the bell Wednesday.

Joby, which in December said it would invest in equipment, facilities, and employees to double its aircraft production output by 2027, is offering convertible senior notes due 2032.

According to reporting by Bloomberg, the notes are being offered with an up to 30% conversion premium. Bloomberg reports that the company is pricing its share offering between $11.35 and $11.75, representing up to a 15% discount on the stock as of Wednesday’s close.

Joby ended its third quarter with $978.1 million in cash and cash equivalents, down slightly from its second quarter. Its shares have risen 62% over the past 12 months, compared to a more than 14% loss for its rival Archer Aviation in the same stretch.

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