What happened
Shares of Nano Dimension (NNDM -1.64%) rose 42.2% in December, according to data from YCharts. The stock got a boost after the company announced that a substantial number of customers had put in orders for upgraded DragonFly 3D-printing machines. Shares continued to climb higher despite the company conducting substantial new share offerings in the month.
December's impressive gains followed a 110.5% surge for the company's share price in November. Nano Dimension closed out 2020 with its stock up roughly 260%.
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So what
Nano Dimension gave an update on its business in a press release published on Dec. 4. The company revealed that 10 customers had upgraded to its new 24/7 DragonFly LDM machines in 2020.
The announcement suggested that customers were seeing strong results from Nano Dimension's technologies and were willing to invest in upgrades despite pandemic-related headwinds. The list of customers who upgraded to the new machines included U.S. government agencies, leading European electronics manufacturing organizations, and research institutions.
Nano Dimension also completed substantial new direct share offerings in December. The company published a note on Dec. 9 announcing that it had closed the sale of 30 million shares at a price of $6 per share in a direct offering handled by Fordham Financial's ThinkEquity division. Nano Dimension followed up the offering with an announcement on Dec. 30 that it completed the sale of roughly 33.3 million more shares at a price of $7.50 per share in another deal handled by ThinkEquity.
Now what
Despite the coronavirus pandemic prompting some companies to scale back on growth initiatives, there are signs of strong momentum in the broader semiconductor space. Nano Dimension's 3D-printing technologies for the additive manufacturing of chips and advanced electronics components will likely see stronger demand in 2021, and the versatility of its machines suggest the business may have a long runway for growth.
While the company's stock performance has been undeniably eye-catching, investors also have to keep the potential for further stock dilution in mind. Nano Dimension now has a market capitalization of roughly $1.6 billion, and new share offerings have played a bigger role in the company's skyrocketing valuation over the last year than gains for its share price.
Demand for the company's additive manufacturing technologies could rise dramatically over the long term, but this is still a speculative growth play, and investors should keep an eye on new share offerings and the risk of stock dilution.
