3D Systems Surges as Conference Sparks Takeover TalkSarah Rabil and Caitlin McCabe
3D Systems Corp. climbed after canceling a conference appearance, joining an industrywide rally among makers of three-dimensional printers.
3D Systems won’t be able to attend a Pacific Crest Securities conference in August because of management scheduling conflicts, according to an e-mail from Stacey Witten, a representative for the company. 3D Systems had tentatively planned to attend but hadn’t yet confirmed for the event in Vail, Colorado, according to the statement. The cancellation may be stoking takeover speculation, said Angelo Zino, an equity analyst from S&P Capital IQ in New York.
“We’re definitely viewing them as more of a potential takeover than we have in a long time,” Zino said in a phone interview.
Makers of 3-D printers, which layer materials to create objects, have been frequently speculated as takeover targets since Stratasys Ltd. bought startup MakerBot Industries LLC for about $400 million last year. The printers are gaining in popularity as they become more affordable, and the market is expanding after generating as much as $2.9 billion in revenue worldwide last year.
3D Systems rose 6.1 percent to $63.46 at the close in New York today, giving the Rock Hill, South Carolina-based company a market value of about $7 billion. The shares earlier gained as much as 16 percent. About 20 million shares traded hands today, more than quadruple the average volume in the last three months.
Rival 3-D printing stocks also spiked. Voxeljet AG’s American depositary receipts climbed as much as 31 percent, ExOne Co. jumped as much as 23 percent and Stratasys added as much as 13 percent. At the close today, Voxeljet was up 24 percent to $25.90, ExOne had gained 13 percent to $44.96 and Stratasys had paired its gain to 2.3 percent to $116.22.
Wamsi Mohan, an analyst with Bank of America Corp., said 3D System’s rally over the last two weeks has been driven by high short interest “compounded by extremely limited borrow resulting in very high borrowing costs driving a de-risking rally.” Mohan still recommends selling the shares.
The stock has risen 30 percent since June 12. Almost 19 percent of 3D Systems’ shares outstanding were sold short as of June 30, according to data compiled by Markit Securities Ltd.
3D Systems is still likely to pursue more takeovers this year, Mohan wrote in a research note today.