Hedge Funds

Hey, Einhorn? Athenahealth a $1,000 stock, CEO says

Athenahealth CEO: We are not a BPO
Athenahealth CEO: We are not a BPO

Athenahealth Chairman and CEO Jonathan Bush told CNBC on Thursday that hedge fund manager David Einhorn's disclosure of a short case against his company allows him to get out and educate investors about the company's value.

"I'm absolutely sure this is a $1,000 a share stock," Bush said in a "Squawk Box" interview. "I have no idea when it gets there."

Read MoreDavid Einhorn tells investors to short Athenahealth

But he admitted: "I don't know anything about valuations, so for all I know [Einhorn] is right."

 How Athenahealth makes money: CEO
How Athenahealth makes money: CEO

Einhorn, co-founder of Greenlight Capital, called Athenahealth a "bubble" stock that could fall 80 percent or more from its peak share price of more than $204 in March. He also said the company's potential products are being overvalued.

On CNBC Thursday, Bush described the way his company makes money and, what he sees as the best indicator of future success.

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"What somebody should do is look back at [doctors] that have been on the network for a while. There are five, six products you can buy. Most of them try one, get on, and then little by little by little, they add products," he said. "Maybe they have big discounts in the beginning that go away over time. As they add products, the revenue-per-doctor on the network of the more mature ones goes up and up and up."

Member medical practices give Athenahealth a "small percentage of the collections" from problems solved by the company's services, he added.

Who cares about net income: Athena CEO
Who cares about net income: Athena CEO

The stock closed Wednesday at $107.85. (Click here for the latest quote.)

Bush defended his company after Einhorn revealed a short position in the stock earlier earlier this week. Athenahealth makes Internet cloud-based solutions for medical billing and practice management.

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"It's not ... BPO [business process outsourcing], it's not an enterprise software company, it's not even a SAS [software as a service] company," the Athenahealth co-founder said. "It is a software-enabled service."

Cramer's stocks to watch: Athenahealth & Tesla
Cramer's stocks to watch: Athenahealth & Tesla

"It is a company that takes software and gives it to customers in exchange for solving complicated and expensive problems that they hate and stink at," he added.

Shares of Athenahealth have dropped nearly 15 percent as of Wednesday's close—two days after Einhorn's presentation at the Sohn Investment Conference in New York.

Einhorn is not the only one betting against Athenahealth.

Shares on loan—a common measure of short interest—is nearly 18 percent of outstanding stock, according to data tracker Markit. That's down from about 32 percent in March 2010, 35 percent in March 2012 and 22 percent in October 2013.

"If [the stock] drops and stays dropped, we will pay people there and then they'll get the upside from there," said Bush, who is paid in stock options. "Let the record show at $195 [a share]. I have to wait a while for my next million."

"But that's the point of paying CEOs in options," he continued. "If they don't deliver the value, the market doesn't see it, they shouldn't make any money. I'm OK with that."

—By CNBC's Matthew J. Belvedere