Stratasys to streamline in bid to halt slump

Dr. Yoav Zeif credit: Stratasys

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After rejecting offers valuing the company at up to $1.7 billion last year, the Israeli polymer 3D solutions company now has a market cap of just $489 million.

In July 2023 Israeli polymer 3D solutions company Stratasys (Nasdaq: SSYS) turned down two tempting offers to acquire it by US company 3D Systems and Israeli 3D printing company Nano Dimension (Nasdaq: NNDM) at a premium of tens of percentage points above its market price. The offers were at a company valuation of $1.6 billion and $1.7 billion respectively.

Since then Stratasys's share price has fallen sharply to $6.92 per share, giving a market cap of just $489 million, less than a third of the value of the offers. The offers fell by the wayside after Stratasys's board adopted a 'poison pill' mechanism to prevent the takeovers. In 2023 alone Stratasys's share price fell 53%, Nano Dimension's fell 31% and 3D Systems share price fell 66%.

Stratasys's own merger plans also failed to materialize. Last year, the company's shareholders rejected a plan by the company's management led by CEO Yoav Zeif to merge with US company Desktop Metal

At the end of last week, Stratasys's share price fell 10.5% after the company reported its second quarter results and cut its 2024 guidance. The 3D printing industry is suffering from its cyclical nature, as well as general uncertainty arising from the macroeconomic conditions and high interest rates.

The company said it will streamline operations to focus on the products, materials and software solutions with the highest growth potential for it. It is expected to reduce its workforce by 15% by the end of the year (at the end of 2023 it employed 1,980 workers, of which 537 are in Israel). This means the dismissal of about 300 employees, about a quarter of them in Israel.

Stratasys's second quarter revenue was $138 million, down 13.6% from the corresponding quarter of last year, while net loss narrowed by 33% to $25.7 million.

Zeif said, "We continuously evaluate and assess our business model to ensure we are optimally aligned with evolving market conditions. We are confident that our efforts will enable our customers to more effectively address their biggest manufacturing challenges, which should lead to increased adoption of our additive technologies. This realignment is critical to ensure that we can achieve our objectives to deliver sustained profitability and cash flow, while remaining ready to capture opportunities when the spending cycle improves, positioning Stratasys to deliver outsized shareholder value."