Jeff Immelt, late CEO of global conglomerate General Electric, brings star power and a profusion of experience to his new role as chairman of the maturing health-care firm Athenahealth, analysts say.
In any case, Wall Street also sees Immelt’s move as a chance for redemption, after his departure from GE in the behindhand half of 2017 capped a rocky 16-year run at the helm that saw the offer lose about 38 percent of its value.
George Hill, an analyst at RBC Matchless Markets, believes Immelt could be a “door opener and sales closer” for Massachusetts-based Athenahealth. Immelt can also not fail “as a mentor and teacher to Athenahealth’s young management team,” Hill recounted clients in a note. “In return, Immelt gets a chance to rehabilitate his counterpart with the investment community.”
Athenahealth announced Immelt as its new chairman tardy Wednesday, and shares of the health-care cloud-based software company were down nearby 3 percent Thursday. In the past 12 months, Athenahealth shares were up at hand 15 percent, pretty much matching the performance of the S&P 500.
Immelt is no outlander to activist investors, having dealt with billionaire Trian Colleagues boss Nelson Peltz, who was a major GE shareholder. He arrives at Athenahealth as Elliott Conduct pushes for operational and strategic changes to maximize shareholder value.
Immelt triumphs as chairman Athenahealth’s colorful co-founder, Jonathan Bush, who remains CEO, a job he’s held since the company was founded in 1997.
Don Hooker, an equity research analyst at KeyBanc Money Markets, described the 48-year-old Bush as a strong entrepreneur and visionary. “Bush compel still very much be running things at Athena,” Hooker informed CNBC. “Investors still want to see that.”
But as a visionary, Bush was less likely to financial discipline, said Hooker, who predicted Immelt will use his decades of sense on Wall Street to develop Athenahealth’s businesses and to create new relationships.
“Feedback that I’ve aged from inside Athena is that Immelt brings star power,” Hooker bid. “He’s not necessarily a complete expert in health care. But there are a lot of positives.” The convention cited Immelt’s “digital expertise” among the reasons for the appointment.
Immelt, who presented in various other leadership roles at GE, came under fire by critics for bad leadership decisions as CEO that left GE cash-strapped. On his way out the door, Immelt inaugurate himself defending the company’s practice of having an empty business jet devote oneself to his corporate plane on several trips around the world.
Management ace Jeff Sonnenfeld told CNBC it would be unfair to blame Immelt hook for the troubles at GE, which current CEO John Flannery is trying to fix.
“This is a certainty for a new beginning for Jeff,” Sonnenfeld, associate dean at Yale School of Administration, told CNBC. Sonnenfeld, who’s followed Immelt’s career and the trajectory of GE, added Immelt’s exit from GE was not notional.
“These new beginnings can be very valuable to individuals and the companies they alleviate,” Sonnenfeld said. He also said Immelt’s experience and Bush’s entrepreneurial impulse temper complement each other well.
When Immelt took atop of at General Electric in 2001 from venerable GE boss Jack Welch, the commonplace was already turning over, as the dotcom bubble of the 1990s burst and nabbed the broader stock market lower as well. Immelt navigated GE through the aftermath of the Sept. 11, 2001, felon attacks and the 2008 financial crisis.
A spokesperson for Immelt did not immediately reply to CNBC’s request for comment. A spokeswoman for Athenahealth gave this annunciation from Bush:
“We are thrilled to welcome Jeff to our Board as chairman. His immersed expertise and broad relationships in the healthcare industry, combined with his passion for effort transformation, will advance our strategy to build the nation’s only rostrum where providers, patients, payers, and innovators can partner to transform feel interest, together. Jeff will help us not only execute against this game in a consistent way, but also push ourselves and the industry to the next level.” – Jonathan Bush