Wednesday, November 11, 2015

The HYPE is completely OUT OF 3D Systems by now

3D Systems is now waaaaay off its high, and its CEO recently resigned.

I haven’t been following 3D Systems stock for quite some time by now, but, after seeing an analyst’s note about 3D Systems the other day, I took a look and, apparently (well, I guess I should say, “most evidently”), the hype that propelled 3D Systems to a very heady share price of just under $100 is completely gone by now.  Today, 3D System is trading at around $9.00 !!!  Egads !!!  And, apparently, 3D Systems has been mired in red-ink (net income, or, I should say, net loss) the past three quarters.

Regarding the “hyperagressive acquisition strategy” 3D Systems engaged in to grow its top line (see article below, about that), that brings to mind what happened to IKON years ago.  IKON went on an acquisition binge – buying copier dealers, IT services companies, print-for-pay businesses, reprographics businesses, etc., etc. - and, because of its acquisition binge and being unable to swallow and adeptly merge everything it took on, IKON’s stock price plummeted from a once lofty $50+ per share price to less than $10, and, eventually, as we all know, Ricoh bought IKON, ending IKON’s misery.  Lesson learned?  Well, if you’re going to buy everything in sight, anything that moves, be aware that you can get hurt, badly, if you don’t have a good plan to merge, streamline, etc.

On October 29th, this article (see article-title immediately below) appeared on the Motley Fool web-site:

3D Systems Corporation's CEO Abruptly Quits; Next CEO Faces Ongoing Challenges - - - CEO Avi Reichental apparently couldn't wait to announce his departure until next week, when the company reports its third-quarter earnings

In one of the paragraphs in the above-mentioned article, this appears:

A long time coming
In hindsight, the writing has been on the wall for Reichental to resign. Under his tenure, 3D Systems adopted a hyperaggressive acquisition strategy to pursue market opportunities. It resulted in the company making approximately 50 acquisitions over the last four years, which, in turn, led to a host of execution issues that weighed on its operations, performance, and stock price.

Link to complete article:

This was the next article that appeared on Motley Fool just after 3D Systems issued its most recent quarterly earnings report:

3D Systems Corporation Finishes 10% Higher After Earnings - - - The 3D printing company missed expectations but still managed to rally.

Link to complete article:

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