The Lesson of Voxeljet’s Secondary Offering

April 14, 2014 by Paul Ausick

Last Friday, 3D printer maker Voxeljet A.G. (NYSE: VJET) priced a secondary offering of 3 million shares at $15 a share. The stock had closed on Thursday at $18.55, but fell all the way to $15.01 on the announcement. Voxeljet came public in mid-October 2013 at $13 a share and soared to a high of $70.00 before the air went out of the 3D printing space.

Since the Voxeljet IPO, shares of its major competitors have also lost their glow. 3D Systems Inc. (NYSE: DDD) is down about 15%, Stratasys Ltd. (NASDAQ: SSYS) is down the same amount, and The ExOne Co. (NASDAQ: XONE) is down nearly 50%. The year-to-date numbers are even worse: Voxeljet, down about 62%; 3D Systems, down 48%; Stratasys, down 30%; and ExOne, down 55%.

Was it just irrational exuberance that ran prices up before the fall or is there some fundamental reason for the collapse? From late 2012 to late last year, 3D printing stocks were on a tear and the momentum behind the rise was likely a case on not wanting to miss the bus.

It is possible to argue that Voxeljet and ExOne might have missed the bus by not coming public until last year. Stratasys and 3D Systems are up more than 300% and more than 250%, respectively, since mid-2011, even including the recent slump. 3D bioprinting company Organovo Holdings Inc. (NYSEMKT: ONVO) is up the most, about 370% since its IPO in early 2012, but that is down from a peak that topped 700% late last year. Momentum plays may not last forever, but the effect on the share price does not disappear immediately.

Momentum aside, there is a fundamental leak in the story these companies are selling. At the high-end, customers are few, and at the low-end, competitors are too many. A start-up called Formlabs has raised nearly $3 million in a Kickstarter campaign to launch its $299 3D printer for consumer desktops. Neither Stratasys nor 3D Systems offers a printer anywhere near that price. That may not be a problem because it is unclear how much demand there is for a consumer desktop 3D printer. Still, at $300 it costs less than the latest generation of video game consoles.

Voxeljet has never been a $70 stock. It may become one, someday, but that day is a long way off. The company’s shares have recovered a bit in premarket trading Monday morning. The stock is up about 1.2%, at $15.28 in a 52-week range of $15.01 to $70.00.