The wild and often unpredictable persona of Athenahealth CEO Jonathan Bush shouldn’t really come as a surprise to anybody who has been following the company over the last decade. What should come as a surprise, however, are continued allegations of domestic abuse and sexual harassment which have been ongoing for years but were updated, supplemented and amplified in a Bloomberg article out over the weekend.
The article details new alleged inappropriate behavior by the company's chief executive officer. Bloomberg claims to have seen a video of Bush, in 2017, at a healthcare industry event where, dressed up as a character, he states he wants to "jump down on" one of his female employees and "do inappropriate things" to her:
A 2017 video clip seen by Bloomberg of Bush at a health-care industry event features the CEO dressed up as a race car driver, pretending to be the title character from the 2006 comedy “Talladega Nights: The Ballad of Ricky Bobby,” and at times reading from a cue card.
Midway through the skit, he says he wants to “jump down on’’ one of his female employees “and do inappropriate things.” He then briefly pauses. “Uh, but obviously that’s totally inappropriate and would never happen or be said on a microphone.” The exact context of the remarks isn’t clear.
This comes just a week after the CEO has apologized for assaulting his ex-wife and after new public records came out regarding a female employee who described working for Bush as a "sexually hostile environment", according to Bloomberg.
These allegations follow a string of allegations and questionable actions by CEO Bush, dating back years, who is the nephew of President George W Bush. Previously, there were other incidents in 2006, 2007, and 2009.
In 2006, there were allegations of domestic violence:
Bush has also faced allegations of physical abuse of his former spouse.
In court records from a 2006 custody battle in Massachusetts, his ex-wife Sarah Seldon alleged that Bush punched her in the sternum, and pushed her on other occasions more than a decade ago.
The assault occurred at their home “while she was holding their one-year-old son in her arms," according to the court documents.
In 2007 there were allegations of inappropriate workplace behavior:
Bloomberg also obtained a 2007 complaint filed by a female Athenahealth employee with the Massachusetts Commission Against Discrimination, a state body that investigates discrimination complaints.
The woman, who according to the complaint worked as a manager for Athenahealth, alleged that she was wrongly terminated and was told she was “destructive to the team,” despite being given positive performance reviews. In the complaint, she said Bush “engaged in highly inappropriate conduct regarding a female employee at an awards banquet in or around early 2005.”
As was the case in 2009:
Bush also faced a complaint in 2009, by another woman who said she was mistreated and left the company in part because of the “sexually hostile environment which I was forced to work in.”
The former employee alleged in a complaint to the Massachusetts commission that Bush had stared at her breasts, made sexual remarks and talked openly about his sex life in a way that made her uncomfortable. The complaint was first reported by the New York Post.
This behavior was supposedly one of the reasons that Elliot Management made an offer to buy the company - an offer that the company has so far ignored. Elliot seems to believe that the company is poorly managed in that more value can be driven out of its otherwise stagnant shares with a more effective management team. The article continued:
The company is facing a takeover attempt by the hedge fund Elliott Management Corp., which has cited Athenahealth’s poor management as one reason for its underperformance. The company, which makes an online platform doctors use to manage their practices, so far hasn’t bowed to Elliott’s proposal to buy it for $160 a share.
Even so, Jesse Cohn, a partner and senior portfolio manager at Elliott, said in the May 7 letter that “it is clear to us and becoming clear to many others that Athenahealth’s potential will never be realized without the kind of operational change that the company seems unable to deliver.”
But again, this isn't the first time that Bush's behavior has been front and center in an argument against the company being mismanaged. David Einhorn was famously short the stock back in 2014, and one of the centerpieces of his ongoing short campaign against the company was the unpredictability and the volatility of Mr. Bush as the company CEO. Mr. Einhorn thought the stock was in bubble territory back in 2014, as we reported then:
At the same time, there are a number of tech stocks that are caught up in a smaller version of the 1999-2000 internet bubble, and as we mentioned, we created a bubble basket to short them. At this year’s Sohn Investment Conference in May, David presented athenahealth (ATHN), a healthcare IT company, as an example of a bubble basket stock. In response to our assertion that the shares are absurdly overvalued, CEO Jonathan Bush summed things up perfectly a few days after the conference when he told Bloomberg TV, “And those who buy our stock should not be sort of bottom [line] watching value investors. They should be people who dream of a health care cloud.” At Greenlight, dreams do not form the basis of investment theses.
We will know more about whether or not the company will accept its go private offer at $160 a share after the company's annual general shareholder meeting, which is scheduled to take place on Wednesday of this week.