Einhorn Says Greenlight Betting Against Athenahealth

David Einhorn, co-founder of the $10.3 billion Greenlight Capital Inc., said he’s betting against software company Athenahealth Inc. and the shares could fall as much as 80 percent.

“Even though we’re short, I’m no way rooting for it to fail,” Einhorn said today, speaking at the 19th annual Sohn Investment Conference in New York. “The stock is simply at the wrong price. It is caught up in a bubble.”

Einhorn said the stock, which closed today at $126.78, is worth about $50 and may fall well below that level. Watertown, Massachusetts-based Athenahealth, which provides Internet-based business services for physician practices, slid 12 percent in after-market trading after Einhorn spoke.

Holly Spring, a spokeswoman for Athenahealth, didn’t immediately respond to a phone call and e-mail after regular business hours requesting comment on the presentation.

Einhorn, 45, said last month in a quarterly letter to clients that his New York-based Greenlight is betting against a group of technology stocks as evidence grows of a bubble. He didn’t name any of the stocks in the letter.

The fund manager was critical of a Morgan Stanley research report on Athenahealth last month that outlined a bullish case for the company.

“Its main problem is that it isn’t positioned to succeed the way the bulls hope, and the assumptions the bulls are making are not plausible,” Einhorn said.

Einhorn said the market clout of rival Epic Systems Corp., a closely held software maker for the health-care industry based in Verona, Wisconsin, will grow.

Einhorn is a frequent speaker at the annual Sohn conference. In May 2008, he recommended betting against Lehman Brothers Holdings Inc. because it needed more capital to recover from credit-market losses. Lehman Brothers filed for bankruptcy that September.

Before it's here, it's on the Bloomberg Terminal.