Could Options Activity in 3D Systems be Pointing at a Takeover?

With recent news that Yelp Inc YELP and salesforce.com, inc. CRM were putting themselves up for sale, CNBC Contributor Dan Nathan went searching yesterday for "beaten down, once loved" names. He found 3D Systems Corporation DDD - a company that hit a 52-week low and has declined nearly 33 percent this year.

Nathan noted that 3D Systems was in "full-blown mania" in the late 2013, early 2014 timeframe when the stock hit highs near $100 per share. Since then, the price has declined 75 percent as 3D printing hopes were not realized.

Nathan said that yesterday, options action was 1.5x average. Additionally, traders were more interested in buying calls than puts, to the tune of a 2:1 ratio. Additionally, with short interest at 35 percent, Nathan noted that sentiment for the stock is quite bad.

Recently, the company missed earnings and pulled its forward guidance because of "marketplace uncertainties. The company also said that it would undergo an a "comprehensive" evaluation and update the street on its May 6 call.

Specific to trading, Nathan said that he is long August calls, but also pointed out that he saw activity in the June $25 calls. 3D's implied volatility is high, but not relative to where it usually is, Nathan said. The stock is "like a coiled spring with all that short interest," he said, pointing to the idea that a move higher could occur quickly.

Thursday, 3D Systems closed at $22.13, down 3.4 percent on the trading session. In early premarket activity, the stock is indicated at $22.66, up 2.4 percent.