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We have some news from the “New” Nano Dimension.
Nano Dimension is underway a lengthy battle for control, which ultimately was won by a group of shareholders a few weeks ago. There is an entirely new board of directors, and one of their first acts was to remove the existing CEO and appoint an interim CEO, Julien Lederman.
I’ve been quite interested in what happens at Nano Dimension because the company has two major acquisitions that have yet to be concluded. The previous regime at Nano Dimension had struck deals with both MarkForged and Desktop Metal, but had not closed them at the time of the former CEO’s release. The deals have been lingering for so long that Desktop Metal launched not one, but two lawsuits against the company.
This led me to suspect the deals might be in jeopardy, as the shareholders had indicated they were not happy with the previous strategy of acquisitions.
With the management change at Nano Dimension, we haven’t heard their intentions until now.
The interim CEO issued a letter to shareholders, posted on their website, that offers some insight into their current thinking.
Let’s take the letter apart. Here’s a quote that’s notable:
”Investors’ lack of confidence in the value and direction of Nano Dimension is reflected in the Company’s substantial negative enterprise value which has persisted for over three years. During this time, the Company’s total market value has traded at a discount to net cash on the balance sheet and a discount to book value of approximately 50%.”
This is the first time I’ve heard this directly from Nano Dimension, and it’s very true. We’ve been tracking the valuation of major 3D print companies on our weekly leaderboard, and have been repeatedly surprised that Nano Dimension’s valuation has been in the US$300-600M range. Why surprised? Because the company also had cash reserves in the US$1000M range. How could a company be worth less than the amount of cash on hand?
Lederman lists a series of internal issues:
“- There was an absence of the respectful relationships one expects regardless of viewpoints.
– Communications generally lacked a clear explanation of the Company’s financial performance and how the Company could address its persistent operating losses, while at the same time focusing on a range of other matters.
– The Company had a technology vision, but did not articulate a business strategy that outlined a credible path to building sustainable shareholder value.
– Operating expenses that have been persistently too high for the size of the business, even one that is R&D focused.”
These are quite damning of the company’s previous management, and could only be said after a regime change.
Lederman adds:
“I am working to change this with the support and stewardship of the Board.”
But what about those incomplete acquisitions? Lederman explains:
“They remain subject to ongoing regulatory review processes. These transactions have resulted in ongoing discussions with the regulators as well as litigation initiated by Desktop Metal. We are actively engaged in addressing both the regulatory inquiries and the litigation, the outcome of which could impact the timing or ability to consummate either or both mergers under their current terms. Nano Dimension continues to act in compliance with its rights and obligations under each agreement. We will provide updates on the merger agreements as well as the litigation when appropriate.”
To me, this sounds like they might be interested in renegotiating the agreements at more favourable terms, or perhaps even abandoning the agreements altogether. Desktop Metal’s valuation has been trending down ever since the management change took place, suggesting that investors feel there may be a change coming.
Another interesting point:
“We are instituting measures aimed at restoring good governance that will demonstrate that the Company’s directors and management are ultimately here to serve the shareholders. One of those first steps is that the Board decided to let a Shareholder Rights Plan (or “poison pill”), which was put in place and renewed by previous directors, lapse on January 25th, 2025.”
This was a procedure installed by the previous management to protect them against shareholder action, which ironically contributed to management’s downfall in the end.
Finally:
“We are instituting measures aimed at restoring good governance that will demonstrate that the Company’s directors and management are ultimately here to serve the shareholders. One of those first steps is that the Board decided to let a Shareholder Rights Plan (or “poison pill”), which was put in place and renewed by previous directors, lapse on January 25th, 2025.”
This is quite a change. Instead of acquiring random 3D printer companies, the new management is simply buying back company shares, taking them off the market. This will boost the company’s stock price because there are fewer shares, and is likely the most efficient use of their cash reserve at this point.
Welcome to the new Nano Dimension.
Via Nano Dimension