3D Systems Class Action Brought Up by Scott+Scott, Attorneys at Law, Suggesting Investors were Misled
If you are an investor within the stock market, particularly in the penny stock market (which I admittedly had an affair with back in the early part of this decade) then you are likely familiar with the class action lawsuit. Typically owners of a particular company get together to sue that very company, along with its executives and directors, for actions they feel unfairly cost them money.
Although many class actions often do have legitimate cases, there are just as many that seem like more of a way for investors to direct blame away from themselves for a poor investment decision on their own part.
With multiple 3D printing stocks plummeting over the last 12-18 months we were sure to see a class action or two pop up as investors begin playing the blame game, while also hoping to recover some of their losses. Four months ago the first 3D printing stock class action suit was brought up against Stratasys Ltd. by Robbins Geller Rudman & Dowd LLP, in the US District Court for the District of Minnesota, alleging that the company and certain of its officers violated the Securities Exchange Act of 1934. The suit claimed that the company had misled investors following the MakerBot acquisition among other things.
Today yet another class action has been brought up, this time against one of Stratasys’ main competitors, 3D Systems (NYSE: DDD). The complaint, brought up by Scott+Scott, Attorneys at Law, LLP, is a class action on the behalf of investors in the company who purchased their shares between the dates of October 29, 2013 and October 22, 2014 (the “Class Period”).
This complaint, which was filed in the United States District Court for the District of South Carolina, alleges that the Defendants, 3D Systems, Abraham N. Reichental (CEO) and Damon J. Gregoire (Vice President Mergers and Acquisitions) had driven up the share price of the stock by issuing misleading statements to the public concerning:
- The company’s ability to increase the capacity of its metal printing business
- Demand for its consumer products
- The value of various acquisitions
- Expected earnings via guidance
According to the complaint, the issues culminated when 3D Systems announced their third quarter 2014 results on October 22, 2014 to the market’s surprise, which the company claim stemmed from capacity constraints for their direct metal 3D printers. Within that single day shares fell by approximately 15% on above average trading volume.
The complaint also claimed that these misleading statements allowed the company to raise an additional $300 million via a secondary offering of 5,950,000 shares of their stock on May 29, 2014, while executives Reichental and Gregoire sold a substantial amount of their personal shares on the market, valued at over $11 million combined.
“As a result of Defendants’ wrongful acts and omissions, 3D shares traded at artificially inflated prices during the Class Period, and Plaintiff and other Class members suffered significant losses and damages. Accordingly, Plaintiff hereby brings claims against 3D and certain of the Company’s senior executives and Directors that exercised control over the Company during the Class Period,” states the complaint.
While this suit certainly has the right to question statements made by Reichental, Gregoire, and the PR department, it will be tough, in my opinion, to prove that any of the individuals or groups representing the company did so in a manner to mislead investors. While 3D Systems’ share price is down considerably, and revenues are not close to what the company had led investors to expect, the same is the case for numerous other publicly traded 3D printing companies as well. A major correction took place over the last year within the entire sector of stocks.
Are you taking part in this class action complaint? Let us know your thoughts on this news in the 3D Systems Class Action forum thread on 3DPB.com.
You May Also Like
Energizing Turbomachinery Innovation with Additive Manufacturing
Even though the global movement to reduce greenhouse gas emissions is spurring a shift to renewable sources of energy, fossil fuels still generate 64 percent of today’s electricity, according to...
3D Printed Touch Sensors Yield Feeling Future for Cybernetics
Around the middle of the twentieth century, America’s electronic communications infrastructure started to centralize around two newly-forming sciences — cybernetics and information theory — that are still fundamental to everything...
Startup Accelerator, Singapore: Medical, Wearables, and Low-Cost 3D Printing
In this installment of our series, we are looking at the Singapore 3D printing ecosystem. By giving you an overview of some of the 3D printing startups in Singapore, we...
3D Printing Keynotes, Thought Leadership Panels, 250+ Exhibitors, & More at RAPID + TCT 2021
Everybody who’s anybody in the additive manufacturing industry is getting ready for RAPID + TCT 2021, being held at McCormick Place in Chicago from September 13-15. This is the 30th...
View our broad assortment of in house and third party products.