Another Bush


Dear Mr. Berko: I am thinking of investing $15,000 to buy 100 shares of Athenahealth, which was founded by Jonathan Bush, the nephew of George H.W. Bush, our 41st president. I think this would be a good investment because the Affordable Care Act will be a boon to the medical profession — especially companies such as this one, which helps doctors collect their fees from insurance companies. My dad is a recently retired physician, and his biggest complaint was that the insurance companies always tried to shortchange him and other physicians. Three years ago, Dad’s four-physician practice hired another full-time employee at a $46,000 salary just to coordinate their billings with over a dozen insurers so their practice didn’t get shafted. Do you think an investment in Athenahealth would be a good bet?
— MW, Durham, N.C.

Dear MW: It seems that you and most investors don’t know the difference between an investment and a speculation. If you invest $15,000 in a company that trades at 850 times next year’s earnings (Athenahealth, according to Value Line, may earn 15 cents a share in 2016), it’s a speculation, not an investment. And that’s dumb — really dumb. In fact, it’s industrial-strength dumb. Athena is the Greek goddess of military victory and wisdom. But the daughter of Zeus, in all her power and providence, couldn’t help Athenahealth earn enough to buy souvlakia for dinner. Athenahealth lost 8 cents a share in 2014, and Value Line predicts a 15-cent-a-share loss in 2015.
Athenahealth (ATHN-$122) is a public company co-founded by CEO Jonathan “Doofus” Bush, who is former President George W. Bush and presidential wannabe Jeb Bush’s cousin. ATHN provides Internet-based business services (billing functions, medical records coordination and practice management platforms) for physicians. Since the company came public with 6.2 million shares at $18 in June 2007, ATHN’s revenues have zoomed from $100 million a year to $753 million last year. ATHN’s share price followed, rising above $200 in early 2014, when mush-brained speculators believed that it would be profitable. ATHN then abruptly crashed below $100 that year because profit projections proved to be rain in the sky. Early this year, speculators again believed that ATHN would post a profit, and the stock jumped back to the $140-$150 range in February. Fors fortis!
ATHN is an unremarkable company founded in 1997 that became a remarkable company because Jonathan is a son of a Bush. Though revenues increased tenfold between 2006 and 2014, net income has been disappointingly uncooperative. Any doofus can grow revenues peddling a needed product and selling it below cost. But the pudding’s proof lies in the profit that Doofus, who enjoys bragging about the time he “almost had sex” at Camp David, can’t produce. Almost any multibillion-dollar Internet-based service company (except can be obscenely profitable. All such a company needs are four crucial components: competent management, wise spending controls, a knowledgeable board and a good business model.
David Einhorn, the legendary CEO of Greenlight Capital, agrees with my assessment of ATHN. He refers to it as the “poster child of bubble stocks.” Einhorn has a significant short position, believing that the shares are ridiculously overpriced. He recently commented to Forbes, “The valuation is so high that even if the revenue was growing considerably faster, it would still be too high.”
Now, if Jeb Bush gets the Republican nod to run for president, ATHN, even if the company suffers big losses next year, will be a shoo-in speculation but still a lousy investment. And if Jeb is elected president, you can be certain as spring showers and May flowers that ATHN will be trading at a much higher price and that revenues will go nuclear.
Cerner Corp. (CERN-$73.60) is one of the many companies in the same business as ATHN. By comparison, CERN had $3.3 billion in 2014 revenues, had profits of nearly $550 million that year and has increased earnings for a dozen consecutive years. Jonathan, a fortunate son of a Bush, could learn a lot from CERN, which is a magnificently run company.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at