Both 3D Systems and Stratasys stock prices have been zooming up and down lately, but what’s behind it?
The stocks went down around October 13, crashing almost 10%, which is quite a bit for only a single day. To put that in perspective, 10% per day means you disappear in just over a week.
Then on October 20th, Stratasys stock jumped back up almost to where it was before the mysterious crash. Meanwhile, 3D Systems remained at the lower level it had arrived at during the mini-crash.
There seems to be two causes for this turn of events. First, HP announced they’ve entering the 3D metal printing business on Friday afternoon. This announcement, timed towards the end of the day, left investors all weekend to fret about their investments in 3D Systems and Stratasys, and inevitably resulted in a drop on the following Monday.
The second trigger was an investment report from Susquehanna International Group, a “global quantitative trading firm”. In the report, the investment firm feels that their earnings will be good and projects a higher stock price. But also they propose the idea that someone will buy out Stratasys, which often involves a boosted stock price to convince stock owners to sell.
It’s all speculation, obviously, but the stock price is quite real. Some people will make (or lose) a lot on these price shifts. What’s strange about this situation is that while the stock price flies high or crashes terribly based on speculation from outsiders, the two companies have not materially changed anything during this period. They’re just going about their business as normal.
It must be troubling for those working at these companies as well. They’re busy working on projects, and more than likely have some level of investment of their own in their company. They likely know more about what’s going on than these speculative analysts, yet have little control over the path of their investment.
But that’s the way of publicly traded companies these days.
And I cannot imagine someone buying Stratasys. I would expect Stratasys to acquire additional capabilities before they put themselves up for sale. Think about it: if the market went crazy on HP talking about selling 3D metal printing equipment in a distant and unstated time period in the future, how much more would Stratasys be worth if they, say, acquired one of the 3D metal printer manufacturers today?
