CGI Group Seen Rebounding From Obamacare Website Failure

CGI Group Inc. (GIB/A) Chief Executive Officer Michael Roach told investors at a conference two weeks before the debut of the Obamacare website that the contract marked the start of a “long-term relationship” and a “significant growth opportunity.”

Instead, Canada’s biggest technology company is now a visible face for software snags on the U.S. government site for the 2010 Patient Protection and Affordable Care Act. That’s made CGI known in the U.S. for the wrong reasons, prompting a five-day stock slide and threatening to dent its reputation.

“CGI is the scapegoat,” money manager Brandon Snow of CI Investments Inc.’s Cambridge Advisors unit said in a telephone interview. Cambridge oversees about C$9 billion ($8.64 billion) in assets in Toronto and owns shares of Montreal-based CGI.

The Obamacare software breakdowns are a setback for CGI, which has the backing of Caisse de Depot et Placement du Quebec, the province’s largest pension-fund manager, and which made more than 20 acquisitions in the last decade to challenge companies such as International Business Machines Corp. (IBM) Created in 1976 by billionaire founder Serge Godin, CGI is the world’s fifth-largest information technology services company, according to an Oct. 16 report by Jason Kupferberg of Jefferies LLC.