After contributing significantly to the hype about 3D printing, the Wall Street Journal seems to have come back to earth.
A column in the usually excellent “Heard on the Street” section states that there “are potentially worrisome signs that 3-D hype may be outpacing reality”.
The specific target of the comments is 3D Systems and its CEO Abraham Reichental, who at times has seemed like the huckster-in-chief of the technology, particularly as it pertains to the low-end consumer market.
Author Rolfe Winkler notes that Reichental recently sold one-fifth of his personal stake in the company—odd behavior for someone who constantly touts its future. The company says he has valid reasons to sell, including his interest in diversifying his holdings.
It’s really hard to get an accurate peg on actual growth at 3D Systems because it has made so many acquisitions (37) in the past four years. The company is actively recruiting resellers, who must buy demonstration equipment that accrues to revenues. The WSJ states that the rapid increase in 3D Systems’ distribution network could create greater inventory than there is demand. This sounds like a potential bubble situation to me.
It seems like 3D Systems is kicking up a lot of dust to impress Wall Street. The company, in fact, has a lot of outstanding technology and first-rate services. Are its core businesses (big, expensive machines and proprietary materials) competitive? It’s really hard to tell. How are the synergies with all the new parts working out? It’s really hard to tell.
To my way of thinking, Wall Street analysts are way over impressed with 3D Systems play in consumer three-dimensional printing.
I repeat what I’ve said all along on 3D printing. It’s a great technology, and one I’ve been writing about since I first interviewed Chuck Hull the inventor of stereolithography at 3D Systems in 1986. It is particularly valuable for creating complex internal geometries. It does so very expensively and very slowly, however. The technology is finding important applications, such as prototyping, creating custom cranial implants, dental work, architectural models, and jigs and fixtures for small volume manufacturing jobs. But it is not a transformative manufacturing technology.
There are some really solid companies in this field, and two or three (Objet Geometries, EOS) that arguably have better technology than 3D Systems. They do not participate in the overhyped consumer 3D printing market.
The price of 3D Systems stock dropped more than $2 at the open today, but recovered some lost ground to finish at $51.90. The price was close to penny stock territory ($2 range) in 2009 when the corporate buying binge began.