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Short-Selling with the O'Neil Disciples: Turn to the Dark Side of Trading by Chris Kacher, Gil Morales

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CHAPTER 8

Case Study #4: 3D Systems (DDD) in 2014

Nobody disputes the phenomenon of the Internet as a truly disruptive technology that has changed the way we do many things, from buying goods and services to keeping tabs on our friends and, in some cases, making new ones. For consumers and investors alike it has served as an obtuse example and demonstration of what is meant by the term disruptive technology. When a hitherto obscure industry like three-dimensional (3-D) printing suddenly saunters into investors’ fields of vision and collective consciousness as a “disruptive technology,” magic happens, as the weekly chart of 3-D printing leader 3D Systems (DDD) in Figure 8.1 shows. DDD actually came public at the end of March 1988, just a few months after Black Monday and the October 1987 Market Crash. The stock had one quick, three-month, 142 percent upside move from an IPO base in the latter half of 1989 and then sank back into obscurity for the next two decades, at one point reaching a low of 50 cents a share in 1992.

In 2012 that all changed, as 3-D printing suddenly came of age as a disruptive technology, spawning big price moves in other names that made up what became known as the 3-D printing group. In addition to DDD, this group included names like fellow “old-timer” Stratasys (SSYS), which had come public in 1994, and newer entrants like Proto Labs (PRLB), Exone Company (XONE), and Voxeljet (VJET). PRLB had come public in February 2012, XONE in February 2013, and Voxeljet ...

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