Greenlight Capital CEO David Einhorn presented his case against athenahealth at the Grant's Investment Conference last week.
The most eye-popping moment was a video clip of athenahealth CEO Jonathan Bush explaining how he calculates growth expectations for the company.
"Well, how did you get to your 30% organic growth?" Bush said to a panel of laughing listeners. "I said I dunno. I got it out of my ass."
Einhorn has been publicly short athenahealth since May 2014. In last week's presentation, he covered a wide variety of topics — including monetary policy and European debt — but really dug into what's going on at the medical-records company.
We've included the relevant part of the slide deck here (the video in which Bush makes his startling comment on numbers is on slide 25).
"At the Ira Sohn conference last year, we allowed relatively generous assumptions in the base case discounted cash flow (DCF) model, which valued athena at $50 per share," Einhorn said in closing. "Back then, we weren't forecasting a big slowdown in enterprise bookings, massive increases in capitalized research and development propping up the income statement, or Epic entering the cloud. As it stands now, we think athena’s business performance is tracking closer to our bear case valuation of $14 per share. We continue to expect the athena stock bubble to pop."
athenahealth is currently trading near $130 per share.
Einhorn first announced that he was shorting athenahealth last May, and he's still short.
Athenahealth is a web-based physicians billing platform.
It's entering the inpatient-hospital market.
See the rest of the story at Business Insider