We’re reading a piece in TheStreet that describes 3D Systems as a “company on life support”. We’re not in agreement with this notion.
The article cites numerous events, facts and statistics to make their case that the 3D printing giant is “in decline”. Here’s one sample:
The company's valuable patents are expired. It can do nothing to protect itself from competing 3-D printing companies like Protolab, which is actually profitable. 3D Systems is not a price leader. The company is not efficiently run. It is already having trouble competing. And things are only getting worse for 3D Systems.
And so on.
But we think the story paints a picture that is overly pessimistic. There are still multiple good things about 3D Systems that should be considered.
While their prime patents have expired, as more than 29 years have elapsed since their invention of SLA 3D printing, this doesn’t mean they don’t have OTHER patents. In fact, 3D Systems’ labs have been churning all kinds of interesting patents for years, most of which are still in force.
What’s happened is that some competition has emerged based on the ORIGINAL patents, while further system enhancements are still protected by 3D Systems subsequent patents. 3D Systems still has the ability to leverage these for some time yet.
Their main competitor, Stratasys, also has an expired patent scenario, and they seem to have overcome that issue, so there is no reason 3D Systems could not as well.
Yes, 3D Systems has new competitors, but none of them seem to have the same level of distributor and reseller penetration that 3D Systems has developed. That can take years to achieve.
We do agree that 3D Systems does require some adjustments, but at the moment they are in a strange period where they are in-between CEOs, having released their longtime CEO a few months ago. At this time they are searching for a replacement and there is little doubt that the new person will take up the many powerful pieces of 3D Systems and form them into a much improved company.
Finally, the article in TheStreet says one more intriguing thing:
A whopping 33% of the company's shares are being shorted. There are many investors who don't believe in 3D Systems future.
Wouldn’t it be useful for the shorters to have some negative press on 3D Systems?
Makes you think.