Be Patient with Nano Dimension as It Waits for the Pandemic to Pass
I last wrote about Nano Dimension (NASDAQ:NNDM) in early April. Back then, shares of NNDM stock were trading around the $8 mark. On Aug. 11, however, the stock closed at $6.38.
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Back in April, the company — which has offices in both Israel and Florida — had recently finished raising millions of dollars in new capital. The balance sheet showed $1.1 billion in cash and securities at the end of March. Further, Nano Dimension also hired President and CEO Yoav Stern to spend the cash and build up the company.
Stern has since put some of his own cash into warrants, but for the most part, we’re still waiting for his big move. Here’s what you should expect from this stock moving forward.
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NNDM Stock: What to Know About Stern’s Deals
So far, Nano Dimension has made two small acquisitions. Stern has spent a minimum of the corporation’s cash, supplementing the deals with NNDM stock.
First, the company bought DeepCube, which uses artificial intelligence (AI) to manage machines at the network edge. The cash cost was $40 million. Next, NNDM bought Nanofabrica — a maker of 3D micro printers — amounting to a cash cost of roughly $25 million. Nano Fabrica has since been renamed Fabrica. In April, InvestorPlace contributor Mark Hake said NNDM was on the “acquisition warpath.”
As it was lining up Stern and the cash, NNDM also went through a brief vogue as one of the “meme stocks.” Small traders on Reddit saw a short squeeze, pushing the price over $17. However, the price has been falling steadily since.
That said, the idea of additive manufacturing remains very sexy. It seemed that way a decade ago, when I covered naïve efforts to make plastic 3D printers a consumer product. The original effort failed spectacularly. Now, though, things could be on track.
True, Stern has not made any more acquisitions since the spring. But the CEO’s explanation for the lack of acquisition activity came in an Aug. 6 press release. Stern said second quarter sales would be “close to zero” and blamed Covid-19. He also said that he had worked with Needham & Company to identify acquisition candidates and that most were in similar straits.
Finally, Stern told investors not to expect “substantial enough results” for at least another year. However, he also insisted that NNDM’s technology for high-performance electronic devices (Hi-PEDS) is superior to competitors in Asia and elsewhere. So, instead of putting the company’s money into marketing, Stern is putting it into research for next-generation equipment.
For investors, this means wait for your money and wait for his moves.
So… Where’s the Action?
So far, traders looking for excitement in NNDM stock have found it with Cathie Wood. The famous “tech whisperer” has bought shares for two funds — the Autonomous Technology & Robotics ETF (BATS:ARKQ) and the Ark Next Generation Internet ETF (NYSEARCA:ARKW).
These aren’t huge bets. The one in ARKQ represents 1.65% of the total invested. And the shares in ARKW? They represent even less exposure, coming to just 0.80% of the total. Nevertheless, NNDM stock jumped in June, although the shares have since given back those gains and more.
Of course, the moves were natural for someone like Wood. This kind of technology is a thing. The last crown your dentist put in your mouth was likely made with it. So was that new knee for your mom. But it’s a hard slog — a game of developing specific use cases for specific industries and fitting the technology to it.
The Bottom Line on NNDM Stock
All told, this pick represents a very novel idea. NNDM stock is “poised for big things,” as Chris Tyler put it. But just not right away.
If you believe in the technology (as I do) and in Stern (as I do), the way to play this one is slowly. Take a small position and — if the price drops significantly — take another one. Be like Cathie Wood. Don’t put all of your eggs into this one basket. They won’t hatch until the pandemic is in the rearview mirror.
When Stern does strike, you’ll likely see some positive action. But he won’t strike until he’s ready. Stern is patient. And when it comes to NNDM stock, you should be, too.
On the date of publication, Dana Blankenhorn held no positions in companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Living With Moore’s Law: Past, Present and Future available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.
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