Earlier this year industry giant Stratasys struck a deal with MakerBot to acquire the rapidly growing startup. The deal was for an incredible USD$600M+.
Did you ever wonder how Stratasys was able to come up with the cash for this maneuver?
It’s a straightforward corporate move: they issued more shares for sale to the public (through brokers, of course). These new shares diluted the price of current shares somewhat, as the company’s intrinsic value was being spread over more shares. Nevertheless, Stratasys was able to collect USD$402.2M last week for the newly issued shares.
This cash leverages the strength of the company to provide working capital for current and future projects. One of them could be the large MakerBot acquisition. If it isn’t, then what is Stratasys raising money for?