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There is great promise in 3D printing and additive manufacturing (AM). However, despite rapidly growing amid the digital revolution taking place in the manufacturing world, many 3D printing and AM stocks have failed to live up to the hype over the past decade.
nano dimension (NNDM -2.44%) is one such stock. It has fallen sharply since its 2016 IPO, dropping 70% in the past three years. 2023 was another rough year, with Nano Dimension stock not participating in the recent year-end rally for 3D printing stocks (Article from Ark Invest) 3D printing ETF It recovered by more than 30% from the end of October to the end of 2023).
Much of that is due to the company’s ongoing efforts. Stratasys (SSYS -1.58%)are trying to obtain. But will 2024 be the year the Nano Dimension takes off and creates new billionaire investors?
Nano Dimension’s hostile takeover of Stratasys
Nano Dimension is a unique business in the 3D printing and AM space. Even when compared to its smaller peers, Nano Dimension stands out because it currently has very little revenue.
Data by YCharts.
The company has operated primarily as an acquirer of 3D printing and AM startups over the past few years, leveraging the large sums of cash it accumulated during the pandemic-induced market frenzy of late 2020 and early 2021. Part of this cash reserve means Nanodimension still has over $870 million in cash and short-term investments on hand at the end of September 2023.
The company’s latest acquisition target is by far its largest company to date, long-time 3D printing and AM pioneer Stratasys. Stratasys also received an acquisition offer 3D systemwas rejected as “a gross underestimation.”[s] Nano Dimension has acquired a significant portion of Stratasys stock and now owns 14% of Stratasys’ outstanding shares, putting it in a position to at least partially control the fate of its large peer.
Stratasys has blocked acquisitions and even proposed mergers. desktop metal In early 2023 after receiving an offer from Nano Dimension. Led by Nano Dimension’s opposition to the rival deal, Stratasys shareholders voted against the merger with Desktop Metal.
Nano Dimension updated its bid in December to offer $16.50 per Stratasys share, giving it a market capitalization of about $1.1 billion to $1.2 billion. Nano Dimension said it may increase its offer subject to further due diligence. Stratasys says it is considering strategic alternatives.
Wow, what a story.
This is a bit of corporate intrigue about the current state of 3D printing. Of course, the countless smaller start-ups that compete with much larger manufacturing companies and traditional manufacturing equipment suppliers could benefit from some degree of consolidation and should focus more on increasing profit margins. At the time of writing this article, proto lab Although we are profitable on a free cash flow basis, Zometry We’re approaching that milestone.
Data by YCharts.
Will the Nano Dimension rise further in 2024?
At this point, nanodimensions are highly speculative; potentially High reward stocks. This is reflected in this year’s share price performance, which remains stable and close to Nano Dimension’s all-time lows. Its market capitalization of approximately $580 million as of this writing is less than the business’ cash and investment balances. However, there is a necessary footnote, as the Stratasys acquisition will wipe out most of that cash and require additional debt financing if the acquisition is successful.
Additionally, it’s unclear how Nano Dimension and Stratasys’ combined plan will achieve profitability.
This makes sense in nascent industries like 3D printing and additive manufacturing. Even if some companies emerge as outright outstanding investments, it is less clear which companies are likely to emerge as industry or investment leaders. After all, the industrial manufacturing sector tends to be highly fragmented for a reason. There is no indication that manufacturing efforts using digital technology will change anything.
For investors looking for big returns, bets on Nano Dimension should be kept small. There may be a chance of becoming a millionaire, but there is a very difficult road ahead.
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