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WellCare Plummets After FBI Raid

In addition to the comment above, analysts are now playing judge and jury. In our colleagues' intimate wisdom, they conclude that based on the past, only heavy fines will result without the loss of contracts.

We find this amusing for several reasons.

First, how does anyone conclude anything without knowing the facts?
Second, the nature of the raids suggests criminal activity. In the past when criminal cause was proven, companies seized to exist, especially when the Board of Directors was involved. So, based on history, our colleagues' should conclude the exact opposite.
Third, even were we to get the information regarding the FBI raid, we still have to know what the other States are up to.
Fourth, we still don't know how the class action lawsuits will pan out. Again, if there is criminal activity (emphasis on 'if') then there is less of an impact from the class action suits. If not, then the company will have to shell out to shareholders due to misrepresentation. Either way, the stock has little room for sustainable upside.
Fifth, with regard to the problem being connected to only 25% of revenue, this is not how things work in reality. Once branded, the loss of ability to contract with public entities (should it come to that - we do not know anything more than what has been publicized), the rest of the business goes as well as no one wants to be left holding the bag. It is like a run on a bank.

Our guess (emphasis on guess) is that there is criminal activity implications as the FBI waited to raid until the Board was in session. Think about it!

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