Huge news from Velo3D: They are changing their leadership.
Velo3D is one of the most innovative companies today producing high-end industrial metal 3D printers. Their equipment is rumored to be used by a number of high profile aerospace companies, such as SpaceX to produce high performance rocket engines.
Having had significant technical success, the company has struggled on the financial side, as have many 3D printer manufacturers of late. In our weekly leaderboard, Velo3D is perhaps the most volatile company present, with their valuation leaping up and falling down on almost a weekly basis for no apparent reason.
That volatility more than likely reflects the swaying opinions of investors.
Now it seems that Velo3D’s board of directors has taken action. In an announcement on Friday, they wrote:
“Benny Buller has stepped down as the company’s Chief Executive Officer at the request of the Company’s Board of Directors, effective immediately. Mr. Buller will remain a member of the Company’s Board of Directors.”
Buller was the founder and long-term CEO of Velo3D. We spoke with him at length a couple of years ago.
Their board has appointed Velo3D’s EVP of Operations, Brad Kreger, as interim CEO while a formal search for a new CEO is underway.
I find these moments most fascinating when following a corporation. That’s because the choice of new CEO is highly indicative of where the company intends on heading. After all, the prime role of the board is to select a CEO, and they always pick one that specializes in the tasks expected to be undertaken.
So what might Velo3D’s strategy be? It turns out there are some clues in the announcement:
“Additionally, the Board of Directors has commenced a strategic business review process to explore alternatives in order to maximize shareholder value. Potential strategic alternatives to be explored or evaluated may include, but are not limited to, a strategic transaction, potential merger, business combination or sale. There can be no assurance that the Company’s strategic review process will result in any transaction or other strategic outcome.”
That’s significant, and suggests that the board is open to some form of major change. While not guaranteed to happen, it tells you how serious that matter could be if the board is publicly stating this strategy.
Stepping back and looking at this situation from above tells us something else. There has been much discussion about the large-scale 3D print industry in recent months, mostly focusing on the fact that there has been very significant sums of cash put into the technology, yet very little return. In fact, the total valuation of the companies today is vastly less than the amount of money that has been put in.
It seems that the grandiose visions of manufacturing growth by eager startups has not manifested. My thought is that the technology, packaging, pricing and throughput is not yet suitable for industry at large, which has stalled growth. This is perhaps why so many 3D print companies have been financially flat for the past couple of years.
A situation like that is dangerous for companies, as it puts them in a position where consolidation needs to occur: there are too many large companies serving the market.
The statements from Velo3D’s board fit neatly into that hypothesis, and it may be that Velo3D could be the first of many consolidations that occur in 2024.
Via Velo3D
