I received a few requests to feature 3D Systems (DDD), a very hot stock over the past year that has gained a lot of popularity with investors.
3D Systems is a leading, global provider of 3D content-to-print solutions including personal, professional and production 3D printers, integrated print materials and on-demand custom parts services for professionals and consumers alike.
Basically, they make printers that with the use of software, a user can print objects in 3 dimensions. This is a technology that could revolutionize manufacturing as well as personal product development. A lot of investors are taking notice.
Because my time is limited tonight, I can’t go into much depth yet, but I did think it was important to get some information out because it may have been a scary day for investors. The chart that I created tells most of the story, but I’ll take some more time later to describe what’s happening in simpler terms.
Actually it’s more than 250M, it’s another 1.3 M shares from insiders, too, so a good target may be 35-36, yes? They have targeted acquisitions, as the perception is their moat is narrow with few barriers to entry.
I’m not sure I could peg a price on this based on the dilution, but perhaps someone else can help out. It’s not just the dilution but the reaction to it, so it’s probably best to watch for a little to see how the market reacts. It’s down 7% now in AH.
I copied this from the Yahoo boards, so take it for what it’s worth:
mgm2020 • 2 hours 49 minutes ago
Well this certainly changes things quite a bit…
They can’t state what the actual offering price of the shares will be until they determine what trading day it will be based on or the fixed price , but with a $250 million total, the number of shares will be between 6.2 million(if a share price of $40) and 7.5 milliion(if a share price of $35). In addition to the 1.3 million being sold by insiders that is nearly a 10% dilution in terms of total share float. They must be planning a major acquisition if they need so much more capital in terms of shares for the purchase–or even negotiations. But—because the dilution will set the share price back a few percentage points and devalue ALL of the outstanding shares—I also need to recalculate how much of a pullback to expect and a new rebuy point. I had been pegging the drop at 15-20% which placed the buy point at $36.50-$37.50 and even had a buy trigger in place at $38.50–but with the dilution and corresponding price drop, now the pullback and the buy point has moved down to 33.50-$34. Now, to many shareholders this may seem low, but remember, with the nearly 10% dilution and increase in shares, the EPS will now drop by a corresponding amount, and if the price doesn’t show a corresponding drop, then the P/E rises way too much back into bubble territory. It is a shame that management has decided to place a bit of a damper on all of the euphoria since earnings, but—–they would say—it’s just business. This hurts the longs—and inadvertently helps the shorts who can now cover at a lower price if they choose to.
Looks like it is halted this morning. No idea why.
I’m about to grab lunch and took a quick peak at what’s going on today and I noticed DDD hadn’t moved. Based on your comment, now it makes sense. The article I just read says it’s halted pending news coming out, presumably other than the stock offering. We’ll see…stay tuned.
Strange that DDD went up today given the announcement about dilution… any ideas?
Who would have thought? It’s showing amazing strength. It seems that the market just doesn’t care and they want shares of DDD.
It’s amazing that DDD is diluting shares and says they are selling them for $40 and no one seems to care. When bad news doesn’t impact the stock that reads rather bullish.
The options are still not cheap. The market makers for DDD are extremely smart people, and are playing the dumb money very well. Incredible valuation. The short interest is holding this up with little institutional money fleeing this issue. Short interest for 4/30/13 shows 9 days DTC.
Tiger Group is behind DDD pumping just like GRPN , which makes for a good ride up but timing is key. Check out Expedia, which they backed from 26 to about 70, now at around 56. Perhaps now is a good time to buy EXPE?
Whoops, thought that Tiger Global owned EXPE but can’t find the trace… perhaps I misread their stake in Priceline. Anyway Expe is now climbing back from 55.1 to 58.9. I held it from 53 to about 64, and did well, then thought if it drops back to 56 someday I’d buy back in… seems to be in that range now, any thoughts from technicals?
If one believes in DDD’s potential to see 10+ billion in retail sales over the next year now that units can be bought at STaples, could share price go as high as 200 in the next 2 years (barring a crash, or after return from crash)?
I’m thinking it may still be a good time to buy in for the long haul on this one.
Also if target was 54, will it come down now, and if so, where is a good buy-in?
I think a good retrace would be to about 41, yes?
Technically speaking, yesterday became a buy because of the breakout. We would suspect the trendline to now offer support.
Wow… I think Exone is also a strong buy, after earnings beat today (after close) I expect it will go from 48 up to 55…