Why Shares of 3D Systems Corporation Melted Down Today

Is 3D Systems' drop meaningful or just another movement?

May 28, 2014 at 4:10PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of 3D Systems (NYSE:DDD) fell 11% Wednesday after the additive manufacturing specialist surprised investors with another dilutive stock offering.

So what: This time, 3D Systems offered 5.95 million shares of common stock for estimated gross proceeds of $317 million, or an average of $53.28 per share. 3D Systems also granted the underwriter a 30-day option to purchase up to 892,500 additional shares.

Now what: Despite the latest dilution, I can't blame management for raising capital now, with shares trading at a steep 10.5 times trailing 12-month sales and 42 times next year's estimated earnings. Remember that 3D Systems raised roughly $250 million in the same fashion this time last year to help fund its growth-by-acquisition strategy. The stock has risen nearly 30% since then, more than making up for the additional shares. For patient long-term investors, I think today's pullback represents another great opportunity to open or add to a position in 3D Systems.

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Steve Symington owns shares of 3D Systems. The Motley Fool recommends 3D Systems. The Motley Fool owns shares of 3D Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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