From FT Alphaville:
Follow the money, in 3D
ValueWalk has spotted that the chief executive of 3D Systems may not be feeling super confident about his company’s place in the world of 3D printing....MORE
3D Systems Corporation (NYSE:DDD) CEO Abraham Reichental sold 66,700 common shares of his company for just over $4 million on Friday according to a recent Securities and Exchange Commission filing.That comes after a Barron’s hit job, but Citron Research have been on this one for a while.
Initially too early as the shares tripled last year (ooops), their January piece is worth a look for the way it draws an important distinction between the promise of a technological revolution – in this case 3D printing – and a company’s place in that future market.
If you own DDD shares, it shouldn’t surprise to you that the company is a rollup of dozens of acquisitions. Many of these synergize poorly, and most were bought for 2x revenues, while DDD is now selling for over 20x revenues. None of these companies control transformative technologies; the IP landscape for 3D printing is highly fragmented and not dominated by any company. In fact, 3D Systems’ share is about 20%, while one third of the company’s revenue is generated by service bureaus (3D printing’s version of Kinkos) – typically low-margin business with low barriers to entry.However Citron does credit Mr Reichental – who we should mention still owns 1.5m shares – with a terrific job selling the vision of the 3D printing market...