Athenahealth, Inc Under Investigation Over Accounting Irregularities

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Company Name(s): 
athenahealth
Affected Securities: 
NASDAQ: ATHN

An investigation on behalf of investors in athenahealth, Inc (Public, NASDAQ:ATHN) over securities laws violations in connection with possible accounting irregularities was announced.

According to the investigation by a law firm the investigation focuses on reports of possible accounting irregularities at athenahealth, Inc (Public, NASDAQ:ATHN). Athenahealth, Inc launched its initial public offerings in September 2007. Athenahealth announced that it is reducing reported earnings by some two cents a quarter, which would mean that instead of hitting consensus adjusted earnings forecasts of around 60 cents a share for the year, the number would come in at about 52 cents. Brean Murray Carret analyst Bret Jones discovered the mistake already last December and brought it to management's attention without any consequences and according to a recent article by Jonathan Laing Athenahealth “erred… by including in its add-back the entire noncash cost of stock-option compensation to employees”. And also Laing said that “it wasn't that the company didn't know the accounting problem existed” and therefore he recommends that “investors would be wise to pay attention to the backstory leading to the restatement and the way it was handled by athenahealth's management, anchored by company co-founder and first cousin of George W. Bush, Jonathan Bush.” Jonathan Laing also stated that “it should be noted that company insiders used the strength imparted to the stock by the flawed adjusted profit (the stock has more than doubled from its two-year low hit in late 2008) to unload more than $25 million of stock in the past 12 months. Jonathan Bush, in particular, sold more than $6 million of stock over the period. Jonathan Laing final recommendation is that” investors should be concerned that the Securities and Exchange Commission might take some action”.

Athenahealth, Inc., located in Watertown, MA, is a provider of Internet-based business services for physician practices. The Company's service offerings are based on four integrated components: its Internet-based software, its continually updated database of payer reimbursement process rules, its back-office service operations that perform administrative aspects of billing and clinical data management for physician practices, and its automated and live patient communication services. athenahealth, Inc reported in 2007 Total Revenue of $100.77million with a Net Loss of $3.50million and in 2008 Total Revenue of $139.55million with a Net Income of $28.87million. Shares of athenahealth (ATHN) recently traded at $40.61 per share, down from its 52weekHigh of $47.82 per share.