Analysis: Former GE CEO, athenahealth will make good, but risky, partners

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Former General Electric CEO Jeff Immelt joined the athenahealth board of directors as chairman Feb. 7 in what could be a strategic move for both — or a risky adventure, according to an analysis by Fortune Senior Editor at Large Geoff Colvin.

For years, athenahealth has been in trouble in part because it overpromises results of its future products. This has caused its stock to stagnate, Mr. Colvin said.  But, Mr. Immelt could counter this with his corporate America perspective.

Moreover, having run GE's healthcare division before taking on the CEO role, Mr. Immelt knows the industry well, which is why an analyst at RBC Capital Markets dubbed him "a door opener and deal closer" for athenahealth, according to Mr. Colvin.

However, Mr. Immelt didn't leave GE on the best of terms. GE was the Dow's worst performer in 2017 — over Mr. Immelt's tenure. But, athenahealth creates a "low-key re-entry, as Mr. Colvin calls it, into another publicly traded company that offers a refreshing start for Mr. Immelt in the tech startup arena.

But, both Mr.Immelt and athenahealth are assuming some amount of risk under this new agreement. Mr. Immelt faces the risk that athenahealth doesn't produce the results he'd hoped for as Wall Street analysts remain divided on the company's future. And for athenahealth, the risk lies in Mr. Immelt's past. Shortly after he left GE, the company faced scandal when it was revealed an empty corporate jet would fly behind Mr. Immelt's personal jet

Additionally, a recent Securities and Exchange Commission inquiry into GE's accounting and revenue recognition sparks some concerns. In January, GE shocked investors when it revealed a $6.2 billion charge to its earnings based on accounting practices dating back years.

"Jeff Immelt and athenahealth — what do those two see in each other? It's an old story. Both have something to lose but also something to gain. Probably both wish they were in a position to be choosier," Mr. Colvin concluded.

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