Velo3D Leaves NYSE for Over-the-Counter Market—Here’s Why

As financial challenges reshape the 3D printing landscape, Velo3D (OTCQX: VLDX) has moved from the New York Stock Exchange (NYSE) to the OTCQX Best Market, a tier of the over-the-counter (OTC) markets with lower costs and fewer regulatory requirements than major exchanges. Alongside this transition, the company also announced the return of Zach Murphree as Vice President and General Manager, an experienced leader who had a key role in Velo3D’s growth and innovation.

Reaper turbopump showcased by Velo3D at RAPID + TCT 2023. Image courtesy of Velo3D via LinkedIn.

Trading on OTCQX under the symbol “VLDX” began on September 11, 2024. The transition was largely driven by ongoing financial challenges. In late 2023, Velo3D received a non-compliance notice from the NYSE after failing to meet the minimum market capitalization of $50 million and having a stockholders’ equity deficit of $45.5 million. In response to the notice, the company performed a 1:35 reverse stock split on June 13, 2024, to attempt to regain compliance. However, after receiving a second compliance notice from the NYSE, Velo3D ultimately moved to the OTCQX, where it now trades alongside over 12,000 U.S. and international securities on this regulated platform.

The OTCQX is the top tier of the OTC markets, offering companies a more cost-effective way to access U.S. capital markets. This platform allows companies to maintain transparent trading for investors while avoiding the higher costs and complexities of being listed on a larger exchange. To qualify for OTCQX, Velo3D had to meet high financial standards and comply with best corporate governance practices, ensuring investors still have confidence in its regulatory adherence.

While the OTCQX lets companies stay publicly traded with fewer reporting requirements, it often means less visibility and lower trading activity. Unlike traditional exchanges like the NYSE or Nasdaq, OTCQX has a more flexible option. OTCQX differs from the lower tiers of the OTC markets, such as the Pink Open Market or OTCQB, which are often associated with riskier, more volatile stocks. Companies on OTCQX must still meet certain financial and reporting requirements, making it a respected option for firms like Velo3D that are looking to cut costs but still keep investor trust.

Zach Murphree rejoins Velo3D. Image courtesy of Business Wire.

For Velo3D, this move shows its financial struggles and the challenges 3D printing companies have faced in staying listed on major exchanges. In fact, this shift isn’t unique to Velo3D. The 3D printing industry has seen several companies struggle to meet the listing requirements of larger exchanges.

In parallel with this transition, Velo3D welcomed back Murphree. A familiar face, Murphree was instrumental in the development of Velo3D’s key technologies during his previous eight-year tenure at the company. His return is seen as a significant move to drive product innovation and support strategic growth, particularly as Velo3D realigns its priorities and expands its influence in the defense and aerospace sectors.

Murphree’s role at Velo3D has always been pivotal, particularly during the development of the company’s Sapphire 3D printers. His work was crucial in overcoming many limitations of legacy additive manufacturing technology, helping Velo3D customers to move beyond prototyping and into production manufacturing. The ability to achieve machine-to-machine repeatability, which Murphree helped spearhead, was a key factor in the company’s success.

“There are not many people who have the breath of additive manufacturing experience that Zach has, and I believe I speak for everyone at Velo3D that we are delighted to welcome him back to the company,” said Brad Kreger, Velo3D CEO. “Zach is not only a beloved leader but also a highly respected figure in the industry and we’re happy to see him continue to build on the legacy he left at Velo3D. His return will be a significant boost to our business as we complete our realignment initiatives and continue our adoption growth in the defense and aerospace industries.”

Discussing his return, Murphree said he was excited to rejoin Velo3D at this stage of its growth, mainly as the company works on expanding its customer base in aerospace and defense. Murphree had left Velo3D in December 2023, at the same time that former CEO and founder Benny Buller departed. Since then, Murphree has served as Vice President of Business Development at Freeform, a company known for deploying software-defined, autonomous metal 3D printing factories globally.

As Velo3D transitions into its next phase, the return of Murphree and the move to OTCQX both signal a new focus. Especially with Murphree back at the helm of product management and go-to-market strategies, the company is showing its intent to remain a key player in the industry despite current market difficulties.