Further losses are projected to be in the cards for ATHN shares and several health information stocks, after David Einhorn of Greenlight Capital announced that these stocks are overvalued and about to burst a bubble. Einhorn is known for his short stock biases and predicting longer-term downtrends.
The chart shows that ATHN shares have been on a massive decline since March but appears ready to make a quick correction. MACD has already reached the oversold zone and is showing signs of a pullback. In that case, ATHN shares could retreat to the nearest potential resistance at the 200 SMA (simple moving average).
Take note though that the shorter-term 50 SMA hasn’t quite crossed below the longer SMA, which might then indicate a deeper selloff. However, the 50 SMA is already showing a downward move, which means that a cross lower is bound to happen sooner or later.
Einhorn’s Forecast on ATHN Shares
According to Einhorn, ATHN shares are likely to decline by as much as 80% in value as the company keeps missing its targets. He has criticized the company’s CEO, Jonathan Bush, for not being able to manage the healthcare firm properly.
Biotech and health information stocks have been on a sharp decline for the past few months, and it’s no surprise that ATHN shares have been dragged much lower in recent trading. Cerner Corp has peaked in late February before plummeting to $51 per share in recent sessions.
Officials at Athenahealth declined to comment on the ATHN shares selloff and Einhorn’s claims in the meantime. Recall that the company’s stock price has been trading around the mid-$20s level back in 2010 and has reached about 10 times its value trading around $200 in March. Since then, ATHN shares have tumbled close to the $100 mark.
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