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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