It was my random thought, and also because SSYS has so many problems, has difficulty to compete with DDD. It might look for an acquirer itself. And for the buyer it is cheaper to buy SSYS than DDD.
It is very likely that SSYS instead of DDD, would be acquired by a bigger company, and then DDD would have to complete with this bigger acquiror.
You cannot tell now whether or not you should hold it for so long. In the next 2 to 3 years, we shall see clearly if it is for long-term holding.
It has more patents, more kinds of materials to go with their various printers, has metal printings which is good for all light and heavy industries, well-positioned in the medical industries.....and so on.
No governments will ever admit that they waste money. If you spend a little bit time on the recent politics, it is not difficult to know why US navy would spend huge in the coming years to build new warships to deter Chinese growing military presence in South China Sea. China wants to drill oil and gas in the disputed ocean territory, because China is badly in need of energy. Japan cries for help to the US. Chinese have never forgiven Japanese for their massacre in the 2nd World War. Philippines and Vietnam also complain about Chinese growing and threatening military presence in the disputed ocean territory, but they are too small and weak countries to do anything against the Chinese. What is even more irritating to Washington is that Chinese president teams up with Putin, whom the US wants to punish and isolate. Now the US thinks it is highly necessary and urgent to flex its muscle in South China Sea, build and send out the most modern warships to show the world who is the master. I hope they do not start the real war. DDD would benefit from these dirty games. I hate wars but do support economic sanctions and isolation of dictators in any countries.
The government chooses DDD, because DDD has metal printing, and DDD has more than 1000 patents in 3d printing. Navy needs metal printing materials. Government usually chooses the one who has the patent on the technology, so that they do not have to pay royalties and neither do they run the risks to infringe patents.
The amount might be huge, because it is not only R&D, navy might use DDD printers for supply of all metal parts, this is the disruptive change of supply chain. DDD would earn a lot of money from the navy from its material supply. And for the material, DDD earns at over 70% gross margin. This is one of the best contract for DDD!
Of course, this is the reason. Big or not, we do not know at the moment, but the potential is huge, not only the amount might be huge, the length of time could be the next 10 to 20 years or even beyond! It is frightening to the shorts, who can not sleep well with navy contract running and rolling. DDD is going to be one of the most exciting companies to invest for the next decades to come. When you do business with the government, even in the weak economy cycle, there is still money to make, independent of the world economy.
Remain invested until CEO pulls out his money.
This company works for Nasa and has now signed agreement with US navy. Isn't this scaring enough for shorts? Even though their past earnings are not very impressive, their future is immense. The CEO must have considered $22 is the bottom.
I see today announcement positive. The new CFO is more professional and has better qualification in accounting for a public company like DDD. I added a few more shares just now.
This is also my main concern. At the moment they seems to be the world leader, but only has 18% of the world market share. This is a fast growing young industry, I guess no one knows the future. Morgan Stanley reduced holding in SSYS and increased holding in DDD in its lastest reports. SSYS is a major compeditor to DDD. I have DDD shares.
I have been buying all these days. I have no panic and believe some small loss in one quarter is not a big deal. Their gross margin is good. I trust their China business will soon bring good results.
When the stock at the peak of $97, short interest was approximately 14 million. Isn't it clearly enough, a squeeze!
The last spike up to nearly $100 was clearly a short squeeze if you look at the short interest history of DDD. Would the Shorts be squeezed again? Let's wait and see.
Revenue and gross margins are more important than PE ratios for a new growth industry like 3d printing. At the moment DDD and SSYS revenue growth is good, gross margin is also good. What would be their future? We can't tell now. I would wait and see and maintain a hold position.