Shares of companies that sell 3D printers fell on Thursday after Citron
Research said they were vastly overvalued and that the technology,
highlighted this week by U.S. President Barack Obama, has been hyped.
of 3D printers in recent years have turned an evolving technology used
by manufacturers for over two decades toward consumers, offering the
prospect of producing everything from toys to tools in the home, and
sending their share prices soaring.
Citron Research, run by
California-based investor and notable short-seller Andrew Left, issued a
report on Thursday accusing 3D Systems' Chief Executive Abe Reichental
of exaggerating advances in 3D printing and contributing to a bubble in
the shares of 3D printing companies.
"Appearances have become
completely unhinged from reality when it comes to the mania created in
so-called '3D Printing' stocks, and 3D Systems in particular," Citron
Research said. "Behind every good bubble there is a good promoter, in
this case we have the best in Abe Reichental."
Shares of 3D Systems Corporation, the biggest listed U.S. 3D printer maker, fell. So did shares of Stratasys and ExOne.
Research focuses on stocks it believes have been fraudulently and
intentionally overvalued. It said 3D Systems has made no significant
advances in 3D printing technology in the past five years and that it
has recently rehashed consumer products with little change.
Rock Hill, South Carolina-based 3D Systems and Stratasys declined to comment.
known as additive manufacturing, 3D printing creates solid objects from
a digital model by laying down successive thin layers of material.
Under the traditional "subtractive" approach, objects are created by
cutting them out of a solid chunk of metal or plastic.
State of the Union address on Tuesday, Obama pointed to 3D printing as a
technology for manufacturing innovation and said it "has the potential
to revolutionize the way we make almost anything."
Shares of 3D printer stocks rallied the next day.
3D printers are finding new roles in manufacturing, for example, to
create product prototypes and other kinds of one-off production.
such as General Electric Co plan to use 3D printing to build
lightweight aircraft parts. Dentists use it to create crowns in the
space of an hour instead of two weeks.
But today's consumer-level
3D printers can produce little more than egg holders, combs and plastic
sex toys, Citron Research said.
Shares of 3D Systems have tripled
over the past 12 months and recently traded at more than 42 times the
company's expected 12-month earnings.
Shares of Stratasys have almost doubled over the past 12 months. Its stock was recently priced at 39 times expected earnings.
Citron's report, 3D Systems closed down 4.36 percent at $62.75 and
Stratasys ended 6.08 percent lower at $71.20. ExOne closed down 2.96
percent at $27.18.
© Thomson Reuters 2013