Every one of the 3D printing stocks we follow got pounded on Tuesday and apparently the beatings will continue until morale improves. Wednesday trading has the stocks down in the early afternoon by just about the same amount they fell yesterday. And the odd thing is, there doesn’t appear any significant reason for the beating.
3D Systems Corp. (DDD) saw its shares fall more than 6% on Tuesday and today’s drop is quickly approach 6% again. The company’s CFO sold 45,000 shares of stock yesterday and that could have had something to do with the company’s collapsing share price. But he still owns 264,000 shares, so it’s not exactly as if he’s bailing out.
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Shares of Stratasys Ltd. (SSYS) fell nearly 9% on Tuesday and are trading down another 4.3% in the early afternoon on Thursday. The second-largest of the 3D printing companies, with a market cap of $5.7 billion even after yesterday’s haircut, today announced an upgraded version of the desktop scanning program for its low-priced MakerBot printer and even that wasn’t enough to stop the bleeding.
Shares in The ExOne Co. (XONE) lost nearly 8% yesterday and are trading down another 4.5% today. ExOne’s shares added 6.6% on Monday following a price target raise by BofA/Merrill Lynch at both 3D Systems and Stratasys. ExOne’s stock price has more than doubled since its February IPO, even though the stock price today is about $25 a share below the post-IPO high of $78.80.
Germany-based Voxeljet AG (VJET) dropped more than 15% on Tuesday and is trading down more than 16% again on Wednesday. Voxeljet only came public in late October and the shares soared, up by more than 400% on Monday when they hit a post-IPO peak of $70. The stock’s IPO price was $19 a share.
These are all clearly momentum stocks and they all travel on the same bus. An insider sale worth just shy of $3.6 million wouldn’t move GE or GM stock this much, and certainly would move those companies’ peers in anything like the same way. Similarly, a price target upgrade shouldn’t have the same impact. But that’s what momentum plays are all about.
And if you want to see what happens when investors don’t know what they’re playing at, look at shares of Organovo Holdings Inc. (ONVO). They fell nearly 25% yesterday and are down another 12.3% today. The company is developing a 3D bioprinting technology that can create functional human tissues on demand for research and medical use. The company has been publicly traded for about a year and a half and the stock hit a post-IPO high of $13.65 on Monday, before dropping to less than $8.50 in Wednesday afternoon trading. And it’s technology is altogether different from the 3D printer firms, but the magic “3D” is associated with Organovo and it is now suffering from the association just as it was enjoying it only last week.
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Just a word of caution here: these stocks may not be good bets for a widows and orphans portfolio.