Investors Say 3D Printing Overhyped, Undersold
Investors no longer see the world through rose-colored 3D glasses.
Three-dimensional printing company 3D Systems, $DDD, was among the hardest hit technology stocks yesterday. Shares fell nearly 11% and sentiment on StockTwits.com swung to bearish with 57% of investors on the site calling for more losses by Friday morning. The stock rebounded more than 3% by 10 a.m. Friday. But sentiment continued to weaken.
$DDD i got money says this bounce does not Last! I bet she gives it all Right back!
— Michael (@MWM) Apr. 11 at 09:59 AM
Competing 3D printing firms Voxeljet, $VJET, and Stratasys, $SSYS, continued to fall Friday morning. Voxeljet was hit particularly hard. Shares dropped more than 14% by 10a.m. after the company priced a secondary offering of 3 million shares at $15.
— Mike Jones (@NYCHawk) Apr. 11 at 09:45 AM
Three dimensional printing companies suffer from a broad problem impacting all disruptive technology stocks: investors no longer believe that the growth story was much more than hype.
— blackmarkt (@blackmarkt) Apr. 10 at 01:43 PM
3D printers promise to revolutionize manufacturing with the ability to print everything from car parts and shoes to concrete houses. Some even envision a future where consumers print their own toys or clothes with the click of a button.
But investors now doubt that businesses will adopt new manufacturing methods given the weaker global economy. And that means that profit multiples like 3D’s 40X forward 2015 earnings aren’t likely justified. Voxeljet shares fell 13% Thursday and another 14% Friday. Stratasys dropped nearly 7% yesterday and edged lower this morning.
China compounded concerns of a tepid U.S. recovery with Thursday’s trade data that showed March exports in the world’s second largest economy fell 6.6% from the same period a year ago. The data also cast doubt on last year’s reports, which many economists now say were likely inflated.
Some investors wonder whether the chocolate companies, shoe manufacturers and parts suppliers who purchased 3D printers just got caught up in the hoopla, rather than ever saw real value in the machines.
$DDD where are the analysts defending their upgrades at 90 a share? I thought this was due for a sell off but this is sick. Fad?
— Krull (@Hitthebidradio) Apr. 10 at 06:33 PM
Of course, the price action hasn’t turned everyone into a bear. Some investors argue that 3D printing is the future, longs just need to hold through the ups and downs to get there.
— Carol Chen, CFA (@ccpmispy) Apr. 10 at 08:04 PM
$DDD Irrational negativity–it's getting ugly all up in here. Flush, then steady build prior to earnings is my guess…
— kat douglas (@y2kate) Apr. 10 at 06:33 PM
But most investors see too much pain ahead to warrant holding shares.
— Jennifer (@Bullsallday) Apr. 10 at 10:23 PM
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