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Does A GE-3D Systems Acquisition Make Sense?

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Does A GE-3D Systems Acquisition Make Sense?
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Editor's note: This article was first published May 19 and is being re-published below.

In early morning trading, market chatter regarding General Electric Company (NYSE: GE) possibly acquiring 3D Systems Corporation (NYSE: DDD) surfaced. This rumor came in wake of a few interesting news items regarding 3D Systems over the past week.

On Friday, May 15, CFO Ted Hull left 3D Systems after only six months.

Longbow Analyst Joe Wittine

Longbow Research analyst Joe Wittine mentions in his impromptu report that Hull joined Fusion-io prior to his 3D Systems stint.

Wittine suggests, “Some had informally viewed Hull as a caretaker CFO that could suggest a potential sale of DDD.” With his departure, Wittine thought a sale would be less likely, but hedged that statement saying that the board of directors could “throw in the towel and DDD [could be] acquired.”

In an exclusive Benzinga phone interview, Wittine said the key risk to his bearish view on the stock has always been an acquisition scenario such as GE acquiring 3D Systems.

Related Link: Rumor Mill Instigates Brief Rally In 3D Systems

“GE’s strong managerial presence could convince the board of directors to sell given recent internal management struggles," he added, before noting that CEO Abraham Reichental acquired 6,000 additional shares following Hull’s departure on May 15 in a Form-4 filing. That means discussions could not have happened if they were in talks.

Wittine summarized the market chatter saying, “The bottom line is these GE/DDD discussions always randomly surface, and it’s doubtful there is any substance behind them.”

While these events are moving the 3D’s stock, especially with promising 3D printing surveys recently, this rumor is still speculation.

At its intra-day peak, 3D Systems came close to the $24 mark on Tuesday morning. Shares are now down on the day.

Wittine has an Underperform rating with an $18 price target for the stock.

Latest Ratings for DDD

DateFirmActionFromTo
Nov 2016Gabelli & Co.UpgradesHoldBuy
Oct 2016FBR CapitalAssumesMarket Perform
Aug 2016JefferiesMaintainsHold

View More Analyst Ratings for DDD
View the Latest Analyst Ratings

Posted-In: 3D Systems GEAnalyst Color News Rumors M&A Exclusives Analyst Ratings Best of Benzinga

 

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