What often happens after a stock (or a sector) runs to new all-time highs based upon hype and based upon current trends? You often see companies and their corporate insiders sell more shares. That is what we are seeing in the world of 3D printing as 3D Systems Corp. (NYSE: DDD) announced a stock offering which may raise as much as $250 million less than two years since conducting its IPO.
The company announced today that it is conducting an underwritten public offering of approximately $250 million in common stock. On top of that share sale, certain stockholders, officers, directors, and their affiliates are going to sell an additional sum of about 1.3 million common shares in the stock offering.
While 3D will not receive any of the proceeds from the insiders selling shares, the 3D printing company plans to use the proceeds from shares it is selling to finance future acquisitions and for working capital and for general corporate purposes. The company and the selling holders expect to grant 30-day options to the underwriters to purchase up to an additional 15% of the offered shares. Needham & Company was listed as the sole book-running manager of this offering. Canaccord Genuity and Piper Jaffray & Co. were listed as the co-lead managers.
Be advised that this puts 3D Systems as a likely acquirer in the space of 3D printing. Some companies just say “for general corporate purposes” in the Use of Proceeds section. 3D Systems specifically stated that the capital raise was to finance future acquisitions in its release.
3D Systems saw its stock fall 1.27% to $42.62 on Tuesday with a $3.9 billion market cap against a 52-week range of $17.04 to $47.99. Shares are down over 5% at $40.35 in the after-hours session.
Before the effects of this offering, 3D Systems traded at 40-times expected 2013 earnings and 32-times expected 2014 earnings.