Key Points
- 3D Printing Solutions manufacturer Stratasys has been engaged in a round-robin acquisition dance between three peers in 2023.
- Nano Dimension unsuccessfully attempted to acquire Stratasys with multiple bids up to $24.00 per share but faced an internal battle with top shareholder Murchinson.
- Stratasys is still considering strategic alternatives, but no word from the company leading up to its Q3 2023 earnings report in November.
- 5 stocks we like better than Stratasys
The 3D printing industry has been in a round-robin wrestling tournament in 2023. The belle of the ball is Stratasys Ltd. NASDAQ: SSYS, a company that has been both a hunter and the hunted. Stratasys is a polymer-based 3D printing solutions provider that provides platforms, materials and applications that can help speed up and streamline the manufacturing process.
It accommodates various industries ranging from industrial, aerospace, automotive and healthcare. Four companies pursued a round-robin series of acquisition attempts, which resulted in no resolutions as of Oct. 21, 2023.
Nano Dimension Acquisition Attempts
On March 9, 2023, a small additive electronics (AE) solutions provider, Nano Dimension Ltd. (NASDAQ: NNDM), presented Stratasys with a $1.1 billion all-cash acquisition offer at $18.00 per share, a 33% premium.
Nano Dimension’s Dragonfly IV 3D printers utilize inkjet technology to print functional electronics on polymer, ceramics and metal. Its customers range from aerospace for aircraft components to consumer electronics to automotive for sensors and medical to print medical devices, including implants and surgical guides.
The company generated $14.6 million in Q1 2023, serving over 2,000 customers. The company had a stockpile of cash amounting to $1.3 billion. In comparison, Stratasys generated more than 10X Nano Dimensions revenues at $159.3 million in Q1 2023 revenues. Nano Dimension was also embroiled in a battle with its largest shareholder, Murchinson, a non-institutional fund, as it attempted to oust the CEO and attain board seats.
On March 29, 2023, Stratasys rejected the offer, stating it undervalued the company—Nano Dimensions counters with a $19.55 per share cash offer. Stratasys rejects the offer.
On April 5, 2023. Nano Dimensions raises its “best and final offer” to $20.05 per share in cash. Stratasys again rejected the offering the following week.
On May 25, 2023, Stratasys announced a merger agreement with Desktop Metal Inc. NYSE: DM for $1.8 billion, combining metal and polymer technologies under one roof.
On May 25, 2023, Nano Dimensions launched a partial tender offer for Stratasys shares at $24.00 per share in cash, seeking to acquire up to 40% of the company to oppose the Desktop Metal merger. The tender offer expired on June 30, 2023. Nano Dimensions reported it had acquired over 12% of the shares of Stratasys, making it the largest shareholder.
On July 25, 2023, Stratasys implemented a one-year poison pill (aka shareholder rights plan) that triggers if any entity owns 15% or more of its shares without board approval. Nano Dimensions stated they were no longer interested in acquiring Stratasys and would instead be a shareholder.
In August 2023, Nano Dimension’s CEO Yoav Stern stated that Murchinson had no plans to manage Nano Dimension but to pillage its cash. He stated that the Murchinson and Anson Fund Management acquired NNDM shares between $2.00 and $3.00 per share. They would intend to liquidate cash assets around $4 per share, netting them a 33% to 50% return over a six to 12-month period.
On Sept. 6, 2023, 3D Systems Inc. NASDAQ: DDD made an unsolicited offer to acquire Stratasys for $7.00 in cash and 1.6387 of newly issued 3D Systems common stock. This represented an acquisition price of $15.26 per share, which was just a 3% premium to where SSYS was trading that day.
On Sept. 7, 2023, shareholders re-elected all board members and didn't approve Murchison's proposal to remove the current directors at its Sept. 7, 2023, annual shareholders meeting.
On Sept. 13, 2023, Stratasys rejected the acquisition offer from 3D Systems.
On Sept. 28, 2023, Stratasys terminated its merger agreement with Desktop Metal, as 78.6% of its shareholders voted against it. Stratasys initiates a process to explore strategic alternatives for the company. Potential strategic alternatives to be explored or evaluated include a strategic transaction, potential merger, business combination or a sale. The company also extended its three-month shareholder rights plan (poison pill) expiration.
What’s Next?
As of Oct. 20, 2023, Stratasys shares have fallen into the toilet, trading in the $11 to $12 range. The company hasn't announced its strategic alternatives process, which it may update on its upcoming Q3 2023 earnings release scheduled for November 2023. With shares trading near their 52-week lows, speculators and risk-tolerant investors may consider betting on SSYS shares.
Stratasys Ltd. analyst ratings and price targets are at MarketBeat. Stratasys Ltd.'s peers and competitor stocks can be found with the MarketBeat stock screener.
Daily Descending Triangle
The daily candlestick chart on SSYS illustrates a descending triangle pattern. This comprises a descending diagonal trendline resistance converging with a flat-bottom horizontal trendline. The descending trendline started at $15.03 on Sept. 1, 2023, capping the bounce attempts as a falling resistance.
The flat-bottom horizontal trendline is at $11.32. As the stock gets closer to the apex point, it will break out through the descending trendline resistance or the flat-bottom horizontal trendline support. The daily market structure low (MSL) buy trigger is $11.65. The relative strength index (RSI) oscillator is slipping under the 40-band. Pullback support levels are at $11.32, $10.55, $9.52 and $8.57.
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