3D Systems Corp (DDD)

[Lonnie Starr]

Generally if a corp acquires other companies, the assets of those companies goes on the balance sheet as the acquirers assets. 3DS has been buying up companies, but the pundits then fall back on the meme about "successful integration" of those assets/companies, as a way to negate the fact that shares are now worth more (if liquidated) after each acquisition, simply because there are more assets behind each share.

As of this months reporting here: EXTREME VALUE STOCKS The book value per share is $663.32. Meaning that if the company were to liquidate today, you would get about that much per share. If the company is in bk, obviously there is a fire sale on its assets, but if the company is a profitable going concern, they can afford to be choosy and wait for the best price on the assets they offer for sale, meaning you might get more.

The short sellers bet seems to be that either those assets are not going to be worth anything, or that the profits will somehow disappear and the company will be forced into bankruptcy (aka bk). How this might happen to a company with no debt is a complete mystery to me. Worse for the shorters is that P/E means little to nothing in the face of book value for a company like this, in an industry like this. But that's what they've bet some 2 billion dollars on. Hardly a wonder then that desperation would drive a need for plenty of negative articles against the company. But, as you can see, missed earnings did little in the way of damage to the share price. Not only is there no threat of bk or "doubt to continue as a going concern", there are no lenders who can force the issue upon us.

Thus the best strategy here is to hold, accumulate and wait. Because usually as business improves, the stock price will tend to exceed the book value per share eventually. Think of it this way: If you had a bar of gold worth 10k, how much would you sell it for? 3DS has $663.32 in assets for each share of stock, now selling for only ~50 per share. Quite a bargain to be able to buy that much in assets for only 50 or so dollars per share.

Hope this is of some help.