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SLM Solutions
Im hoping some of you are watching SLM Solutions and care to weigh in on it. What do you make of the collapse of SLM Solutions stock price?
I bought into the stock at around 29EUR after the deal with GE was dropped. Today its trading at below 7EUR... Im still holding, and I consider adding now to lower my average price, but I have no clue whats going on. I see that sales and revenue is disappointing and below expectations, but does this mean that they have no future, or simply that they are going through a rough time?
Is it a matter of making bad moves e.g. focusing on speed, build size, surface finish, range of materials, etc. - and getting outmaneuvered by competitors who make better moves?
Or is it a matter of betting on a doomed technology?
It seems that SLM solutions are betting on print speed, working on a new printer with 12 lasers. Is that the right direction for them, given their customers?
Example: I guess print speed is unimportant for e.g. dental, while its likely absolutely critical to e.g. automotive due to component size and quantity?
It also seems that they are betting hard on the asian market - is that wise?
Let me know what you think.
SLM Solutions
Im hoping some of you are watching SLM Solutions and care to weigh in on it. What do you make of the collapse of SLM Solutions stock price?
I bought into the stock at around 29EUR after the deal with GE was dropped. Today its trading at below 7EUR... Im still holding, and I consider adding now to lower my average price, but I have no clue whats going on. I see that sales and revenue is disappointing and below expectations, but does this mean that they have no future, or simply that they are going through a rough time?
Is it a matter of making bad moves e.g. focusing on speed, build size, surface finish, range of materials, etc. - and getting outmaneuvered by competitors who make better moves?
Or is it a matter of betting on a doomed technology?
It seems that SLM solutions are betting on print speed, working on a new printer with 12 lasers. Is that the right direction for them, given their customers?
Example: I guess print speed is unimportant for e.g. dental, while its likely absolutely critical to e.g. automotive due to component size and quantity?
It also seems that they are betting hard on the asian market - is that wise?
Let me know what you think.
SLM Solutions
Im hoping some of you are watching SLM Solutions and care to weigh in on it.
What do you make of the collapse of SLM Solutions stock price?
I bought into the stock at around 29EUR after the deal with GE was dropped. Today its trading at below 7EUR... Im still holding, and I consider adding now to lower my average price, but I have no clue whats going on. I see that sales and revenue is disappointing and below expectations, but does this mean that they have no future, or simply that they are going through a rough time?
Is it a matter of making bad moves e.g. focusing on speed, build size, surface finish, range of materials, etc. - and getting outmaneuvered by competitors who make better moves?
Or is it a matter of betting on a doomed technology?
It seems that SLM solutions are betting on print speed, working on a new printer with 12 lasers. Is that the right direction for them, given their customers?
Example: I guess print speed is unimportant for e.g. dental, while its likely absolutely critical to e.g. automotive due to component size and quantity?
It also seems that they are betting hard on the asian market - is that wise?
Let me know what you think.
Finally, congratulations on Arcam. I received money for my ARCM shares on the swedish stock exchange some time ago. I never held any AMAVF shares.
Are there any news as to when the buyout process will be completed?
When investing, its impossible to hit winners every time. You take risk, and the profit from a few winners should cover the losses of a greater number of losers. This is why investors agree to take risk. Arcam has never been a value investment. It was an investment in a company that had a slim chance at disrupting the world of manufacturing, and a large risk of failing and becoming absolutely worthless.
What im saying is; I anticipate a FAT paycheck for having identified this amazing company and invested in it and carried considerable risk while the future was uncertain. It turned out great, and a huge company like GE has seen the potential and decided they have to have it. But many things could have gone wrong along the way. The tech could have proven to be less promising than competitors, etc. etc. When the risk is high, the same should go for the reward.
This paycheck has to be HUGE.
I don't like it.
The focus is way too broad for my taste. I anticipate that industrial 3D printing in metals will continue to outperform any other type of 3D printing in the near future.Therefore, having ONVO, which is a biotech company as #1, and SLM Solutions which focuses on industrial metal 3D printing as #8 on the ticker weight list shows a completely different focus than what I currently want in my 3D printing portfolio.
SLM Solutions, ticker AM3D, is the best pure play right now that I know of.
I bought into it at 29eur and added more at 33.5eur. Short term is hard to tell, but long term I think its safe to predict a buyout at a higher price than the current all-time high of around 50eur. There are only a few highend industrial players in this sector, and SLM is right at the top. Eventually someone will buy them to grab a piece of the AM pie, like GE did with Arcam.
I don't see how it matters what price it took to get to 50%, 60%, 70% or 80% since these ownership levels do not allow a squeeze out. The important bit is what price it took to get above 90%, and GE was willing to pay 345SEK to get there. I dont see how it can ever be fair under any circumstances to get the remaining shares at any price below that, and in my opinion a premium should be added to compensate investors for being forced out. Atleast the 345SEK deal was voluntary, not forced. Anyways my opinion is just that, an opinion.
Axel Weibull
I am really frustrated by this response from Axel Weibull.
Any price below 345SEK is simply stealing at broad daylight....
The price should be somewhere between 370-405SEK.
The remaining shareholders are being forced out against their will. Most shareholders would likely reject an offer of 345SEK if they had a say in this. This means that GE would never be able to achieve 90% ownership when they did, at any price below 345SEK. Therefore I am baffled by the response from Axel Weibull, mentioning a likely price range between 300SEK-345SEK. How is that fair to the remaining investors?
It is not just about estimating the value of the company or guessing about the future success of the company, because we all disagree on this and only the future will tell who was right. A squeeze out is about investors being forced out against their will. If GE believes that the value of the company is lower than 345SEK, then they dont deserve the privilege to squeeze out the remaining investors! In that case, let us stay invested for the long term for christ sakes!
In my opinion, the squeeze out price should be based on the following ingredients:
1) A base price of 345SEK (below which 90% ownership would not have been possible).
2) A squeeze out premium of 5-15% to compensate investors for being forced out against their will.
3) 2% interest to compensate investors for the time their money is locked up while the squeeze out process is handled. (I personally pay approximately 3% interest on my real estate loan, while my investment funds are locked up in this squeeze out).
This would lead to a price somewhere around 370-405SEK.
What do you make of all this?
How will the recent dramatic depreciation of the Swedish currency affect the buyout price?
Is it fair for investors who have had their funds frozen/locked up for months while the buyout terms are finalized and the currency has depreciated e.g. 5% relative to the Euro, if the buyout price ends at 345SEK?
Any news on the buyout price and payment date?
SLM Solutions buy opportunity?
I have received a letter informing me about the buyout, but no buyout price is mentioned.
I'm still in, and wish that I could stay invested long term. I believe that Arcam was/is brilliantly positioned in the market, and would have continued to give amazing returns to investors if a buy-out had not occurred. I expect a premium on top of the 345 SEK, now that I am forced out against my will.
Thank you all for the great ride with Arcam. And like many others, I want to give special thanks to Charlie for all the great content delivered to this board. Here are my thoughts on some companies that I invest in or have invested in recently:
SLM solutions
It is one of the few publicly traded companies in the metal 3D printing space. It has proven its technology through impressive sales and contracts. I think that SLM solutions is a rare and very interesting company to GE competitors, or anyone interested in the metal 3D printing space. I bought in after GE's takeover bid fell through and the price dropped back to 29Euros, and I recently added a bit more at 42.5Euros.
GE
I bought in mid november at 17.9USD, at what I hope to turn out to be a bargain price in the long run. GE is a huge company (as Trump would put it), and it has a lot of stuff going on. Arcam is currently a very small part of all this, and therefore an investment in GE is in no way viable as a followup investment to replace a holding in Arcam. I see SLM Solutions as a much more direct followup to my investment in Arcam.
Pyrogenesis
I recently sold pyrogenesis with a nice profit after holding it for years with big losses. I dont feel comfortable tying up money for years in a similar situation in pyrogenesis again if that were to happen, so Im out of that one. Also, the metal powder part of their business is the only part I like, and its a small part of the business and therefore not a pure AM play or anywhere near that.
That article contains no insight into why Magnus is leaving as CEO. The title is utter clickbait.
The only vaguely interesting information in that article is this bit:
Unrelated to the planned departures, but a topic of conversation at recent 3D printing events, is the news that Arcam are currently engaged in discussions about the use of one the patents on their EBM metal additive manufacturing system.
An unnamed third party has commenced development work on a system which has attracted the attention of Arcam. We will provide further details when they are available.
This certainly is big news.
I have always had great confidence in Magnus Rene, so my first thought was that this is bad news. My next thought was that maybe the timing is not random. Maybe GE has wanted to replace the CEO, ever since they bought in as a majority shareholder. They may want to do this, to strengthen their control over the company. Whats interesting is the timing. In my mind, its much easier to get rid of a CEO in bad times, than in good times. And right now we are in what I would define as good times. If you replace a CEO in good times, it adds pressure on the new CEO to deliver similar results or better. This could indicate that even better times are ahead. Maybe the timing is now, because large scale printer orders are coming, and they want the new CEO to be associated with that, rather than boosting Magnus Renes image further, which would make it even harder to get rid of him.
Magnus Rene wrote:
With GE as majority owner this is a good time for me to move on and for a new CEO to take over and develop the company in the new environment.
The share price in the weeks before the new share issue was in the range 330-340SEK. The average share price can be argued, but approximately 335SEK. This gives an expected share price after the share issue of approximately 5*335SEK+1*240SEK)/(5+1)=319.2SEK
Since then, the swedish currency has weakened 3.7% compared to EUR or
4.9% compared to USD. To compensate for the currency depreciation for foreign investors who exchanged EUR or USD to SEK to buy their shares, the break even share price should be:
EUR: 319.2SEK / (100%-3.7%) = 331.6SEK
USD: 319.2SEK / (100%-4.9%) = 335.6SEK
With the current share price at 322SEK, this means that investors have lost approximately 3-4% since before the share issue was introduced. This arguably made recent share prices below 310SEK a bargain for foreign investors :)
I wonder how SEK currency depreciation affects Arcam. It reduces their purchasing power externally, but hopefully gives them a competitive edge regarding pricing of systems? Any thoughts on this?
I am still in Arcam, and hoptimistic about the future. I bought all the newly issued shares that I was entitled to. I also signed up for an equivalent number of shares without subscription rights, of which I only got 1 share :)
Due to the recent dramatic pullback in GE, I have also bought a small LONG position there at 17.9$, as I believe the risk of further pullback is far outweighed by the potential for a nice rebound in the months/years to come.
Hi Charlie,
I have received a message from my broker.
As expected, we can sign up for 1 guaranteed newly issued share for every 5 old shares held at the record date.
Unexpectedly, we are also allowed to sign up for additional shares, which we are not guaranteed to receive. This surprises me, as I dont recall it being mentioned anywhere.
Regarding pricing of the new shares, I see it this way:
1) If you price the new shares at market price, the share price can be expected to remain unchanged before and after the new shares are issued. This means that from a relative point of view, it does not matter to your investment if you choose to buy or not. The new shares will be as cheap/expensive as you current shares.
2) If you price the new shares below market price, the average share price can be expected to drop after the new shares are issued. This means that you lose money if you don't buy into the new shares or somehow sell your rights to the new shares.
3) If you price the new shares above market price, the average share price can be expected to increase after the new shares are issued. This means that you have no incentive to buy into the new shares.
So the pricing of new shares affects the incentive to buy or not. Using this logic, it would make sense for GE to price the new shares high relative to the market price, to create an incentive for existing investors to NOT buy into the new shares. This would allow GE to get more of the newly issued shares. So why do they price the new shares at a 30% discount compared to the market value? This should make every existing investor keen to buy all the new shares they are entitled to (100%*240SEK/340SEK=70%). This is indeed odd...
I see two potential reasons
1) This is a game of poker between GE and Elliot. Elliot is already heavily invested in Arcam, and maybe GE senses that the size of this share issue will make it difficult for Elliot to get the money required to stay in the game.
GE: "we raise. Do you call or fold?".
Elliot: "F#%k you Bast!%ds".
2) GE has some other sinister plan to use the cash from the newly issued shares to grow the company, while making sure the stock price remains flat, so that investors get no return on their investment.
I believe in option 1, a game of poker between GE and Elliot.
Hi Tom, I read it differently.
For every ordinary share held on the record date, the holder will receive one (1) subscription right. Five (5) subscription rights entitle the holder to subscribe for one (1) new ordinary share.
For existing shareholders who do not participate in the Rights Issue, a dilution effect arises corresponding to 16.67 percent of the total number of ordinary shares and votes in the Company after the Rights Issue.
I compare it to a game of poker.
They are telling Elliot - We raise you 20%. Do you call or fold?
If you call, we may raise you again...
What does this mean to stock owners?
To effectively drive the continued growth of Arcam, the company's EBM-business will be separated from Arcam AB and placed in a new unit, Arcam EBM.
Ok, I didn't recall that it was confirmed to be Trumpf.
Anyways, I am still kind of hoping that the latest news refer to Concept Laser, as it will validate the statement "in lockstep with GE".
I think its Concept Laser, but I don't have anything solid to base it on, but there are clues out there.
Concept Laser is European (german) and was bought by GE recently (whom SGLB is in "lockstep" with), and Concept Laser attended Formnext 2015 in Frankfurt where Sigma Labs sealed a deal with an anonymous company.
(Arcam is probably out of the question as I dont recall reading about any interaction between Sigma Labs and EBM, only statements about possibilities)
Let me know what you think.
What does this mean to shareholders?
Whats up with the recent advertising on this board for various pay-sites? I dont know any of the sites which are advertised, but the overly positive presentation sounds like a sales pitch to me and makes me suspicious and cautious. Can we please stay on the topic and discuss things related to arcam and 3D printing...
We are probably all wondering - Why the sudden rise in stock price post bid?
My guess is that GE currently holds around 75% and they are in discussion with Elliot about buying his 10%. That means that in order to get to 90%, GE will need to acquire another 5% in the open market.... Thats whats going on.... They want to secure 90% ownership prior to placing volume orders at Arcam :) It may even be Elliot buying to increase his ownership after encouraging secret talks with GE about what they are willing to pay for his shares :) Whatever it is, its looking good on my balance sheet :)
What do you think?
Im in it for the long haul, and have kept all shares.
Cant wait for the first volume order from GE.
I will NEVER sell a single share anywhere near the current price level, so I dont care much about the price action. Im effectively in "lockstep" with SGLB :)
My impression is that EBM can currently deliver more power to the powder and the electron beams are not dependent on moving mirrors to direct the power to the right location. My understanding is that this gives EBM an inherent print speed advantage.
Furthermore, my impression is that EBM has had greater succes in ensuring fully dense parts with less residual stress and thus overall better material properties.
As I understand it, the short comming of EBM is limited build chamber volume (due to vacuum) and rough surface finish.
If GE owns both laser and EBM technology, I think the two technologies could compliment each other nicely. EBM to print the majority of the material and laser to ensure a better surface finish.
In my point of view, Arcam with its patents on EBM, is excellently positioned.
I decided not to gamble on the offer expiration and kept all my shares.
If I were to sell before the offer expirery, it would have always been with the intention to buy back in later. But I decided that I would feel worse about not being able to buy back in if the price kept rising, than I would feel about taking a minor temporary pull back with the shares im already holding. Psychology. I like what im holding.
Excellent document. Thank you.
I note the following:
- Focus on both "in-process" as well as "post-process" NDE (p7)
- Need for specific NDE methods for AM (p13)
- mention of SLM Solutions (p15)
- Mention of EBM
- Mention of GE Aviation, Honeywell, America Makes, etc.
- Mention of CSIRO with regards to "in-process" NDE of EBM parts (p19)
Are you familiar with CSIRO?
Gradually, 3D printing is becoming a bigger part of industrial manufacturing, having started in aviation, where there was a great need for complicated, lighter components. Earlier this year GE also opened the $40 million, 125,000-square-foot Center for Additive Technology Advancement near Pittsburgh, where engineers experiment with new ways to print industrial components using high-powered lasers. In late summer the Advanced Manufacturing Works, located in Birr, Switzerland, commissioned the first commercially available 3D printer to operate with four lasers.
In September the company announced it was buying 3D-printer company Arcam AB of Sweden to help it build a $1 billion 3D-printing business by 2020.
The real question is this:
How can a "democracy" lead to a choice between cholera or gonorrhea?
I have a feeling that "in process" detection and correction of thermal distortion, while the layer is still hot, is very complicated. Its possible that distortion prediction and correction is better handled with "pre process" simulation. The simulation will however most likely only be accurate if very specific machine parameters are given as input. What input are required and their importance are probably not something an amateur can easily figure out, so some kind of standardized machine output parameters for use in simulation would be nice.
These thoughts do not belittle the importance of "in process" layer by layer monitoring of the part build to ensure fully dense parts with material properties according to requirements and for use in as-built documentation.
I bought shares of SLM solutions just now.
Since the GE bid was cancelled, the valuation has almost entirely returned to where it was before the bid. I consider this an opportunity to buy in.
Since the bid failed, it can be argued that nothing has changed in the short term. It can even be seen as a negative event, as GE now might not want to use SLM printers at all moving forward.
However, I believe that direct competitors to GE will not be happy to use GE suppliers for 3D printers. In my mind, the bid from GE validates that SLM sits on solid technology, and this makes SLM a likely target for GE competitors to secure their part of the 3D printing supply chain.
It will be interesting to see what happens to Arcam share price after the bid period ends, and how acceptance/cancellation affects the price of SLM solutions. My expectation is that GE will accept any number of shares in Arcam regardless of the 75% target.
Arcam to pay fine:
Nasdaq Stockholm orders Arcam to pay fine
GE increases bid to 300SEK and will not raise it further:
GE Enhances Tender Offer Arcam AB